SPC supports Tuvalu to complete its petroleum industry review

Photo caption: Government officials in Tuvalu at the workshop.

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Tuesday 9 September 2014, Secretariat of the Pacific Community (SPC), Suva, Fiji.?The small island state of Tuvalu imports about 4.5 million litres of fuel per year, the bulk of which is diesel fuel to generate electricity. This is about twice the volume imported in the mid-1990s and accounts for more than 20% of the total Tuvalu gross domestic product (GDP).

Therefore, there is a strong incentive to address petroleum consumption issues in all sectors of the economy and to devise appropriate policy responses to promote energy conservation. More importantly, the high reliance on petroleum for energy needs and the associated cost highlights the importance of introducing energy pricing templates and other instruments to reduce costs and inform policy decisions that will enhance conservation and end-use efficiency.

In partnership with the Government of Tuvalu, the Secretariat of the Pacific Community (SPC) Petroleum Advisory Service, conducted a petroleum industry review (PIR) and presented the PIR report recommendations to the government during its recent in-country mission.??The mission involved consultations with several industry stakeholders, including the private sector on the PIR recommendations and their implications. The team also assisted in the development of strategies and activities as part of an action plan to progress work toward achieving the agreed recommendations.

The PIR report covered a wide range of issues, including the need to update fuel pricing templates to inform existing price regulation, ensure fuel quality, and enforce accepted industry standards to safeguard public safety and avoid damage to the environment. The PIR recommendations detailed the preferred methodology for reviewing and updating the Tuvalu fuel pricing template as well as developing and introducing a new LPG (liquefied petroleum gas) pricing template.

In opening remarks before a meeting between team members and government officials, Hon. Vete Palakua Sakaio, the Deputy Prime Minister and Minister for Public Utilities and Infrastructure, highlighted the risks and dangers faced by the Tuvalu petroleum sector, the importance of effectively addressing those issues and developing a framework to ensure the safety and economic livelihoods of the Tuvaluan people, as well as the need to actively protect the environment of the ecologically vulnerable islands of Tuvalu.

The team also met with the port authorities to plan a way to address petroleum-related safety issues in the wharf area, including effectively segregating and securing all imported flammable goods and clearing the area immediately adjacent to the bulk fuel terminal for safety reasons.