American Samoa and Samoa punch above their weight on fuel prices

Wednesday 6 August 2014, Secretariat of the Pacific Community (SPC), Suva, Fiji –  ‘Financial gains from increased renewable energy and energy efficiency installations can be easily and quickly lost if the prices of petroleum products are not closely scrutinised and negotiated,’ says Solomone Fifita, Head of the Secretariat of the Pacific Community’s (SPC) Energy Programme. Mr Fifita was making the remark as SPC released the newest edition of a key output of its Petroleum Advisory Services – the Pacific Fuel Price Monitor (PFPM), for the first quarter of 2014.

PFPM is a publication that gathers and analyses fuel-pricing data from around the region and reports that information graphically and analytically, demonstrating the average retail fuel prices, both with and without government tax, that are achieved by member countries and territories during each three-month period of the year. This is compared to fuel prices reported in the larger regional reference markets of Australia, New Zealand, Hawaii and Singapore.

‘Our analysis shows that, while member countries may be getting fuel from the same import shipments, there is a marked difference in the wholesale and retail prices that are charged in each country. This points to differences in pricing practices and the negotiated price agreements that are in place,’ said Alan Bartmanovich, SPC’s Petroleum Adviser.

It is through identifying and highlighting those differences that SPC encourages and facilitates the sharing of best practices among the countries in order for them to achieve better fuel prices and support the gains from their renewable energy and energy efficiency efforts.

The latest version of PFPM, reporting on the period January–March 2014 (1Q-2014) clearly shows that American Samoa, Samoa and Fiji have again achieved the lowest cost (i.e. retail price not including tax) freely-traded motor gasoline (Mogas) prices in the Pacific Island region, rivalling the much bigger markets of Australia and New Zealand, although not as low as that of Hawaii.

The situation is similar for diesel fuel, with American Samoa, Samoa and Fiji fuel costs on a par with Australia for the period and lower than Hawaii and New Zealand.

When comparative market volumes are taken into account, the clear winners for low fuel costs are American Samoa and Samoa. They are closely followed by Fiji, which imports significantly higher volumes and also re-exports, operating as a regional supply hub for its near island neighbours.

Sharing best practice
SPC’s Petroleum Advisory Services actively facilitates information-sharing and networking among member countries and is encouraged by a recent expression of interest from Solomon Islands and other countries to engage with officials in American Samoan to share regional best practices.

Much larger markets, including New Caledonia, Papua New Guinea, Guam and French Polynesia, have all reported Mogas costs of more than 30 US cents per litre (US cpl) above that of American Samoa (90 cpl), as do the comparably sized markets of Solomon Islands and Vanuatu. The very small markets of Niue, Tuvalu, Cook Islands, and Wallis and Futuna all show Mogas costs of more than 70 US cpl above American Samoa and Samoa. A similar situation exists for diesel fuel, kerosene and LPG.

Copies of the 1Q-2014 Pacific Fuel Price Monitor can be downloaded from Pacific Fuel Price Monitor January–March 2014 (Q1 2014).

SPC emphasises how important it is that Pacific Island countries and territories (PICTs) freely share their fuel-pricing information and other industry data, without which it would not be possible to produce the sort of regional comparative analysis that is achieved by PFPM. SPC acknowledges the assistance from PICT pricing authorities, national fuel industry operators and regional oil companies that provide data. PFPM serves as a vital tool for PICTs to identify anomalies in their fuel pricing and, as such, represents opportunities for them to work on achieving more favourable prices.

Petroleum Advisory Services (PAS) advise member PICTs on fuel and LPG pricing, which includes reviewing and developing pricing templates to help PICTs achieve fair fuel prices. In August, PAS will be continuing its engagement with Tuvalu, including a review of its fuel pricing template and development of a new LPG pricing template.

PAS is open to meeting with international suppliers and PICT oil and gas companies, recognising them as integral parts of the supply and distribution chain. Recently, representatives from South Pacific Oil Limited (Solomon Islands) and Winson Oil (Taiwan) visited SPC to discuss various matters pertaining to supply logistics, petroleum supply tenders and pricing.


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