Monday 25 May 2015
Suva, Fiji – For the past ten months, Pacific Island countries and territories have enjoyed falling petroleum prices but there are indications that the region should prepare for rising fuel prices.
Assessments by Economic Development Division of the Secretariat of the Pacific Community (SPC) show that between July 2014 and May 2015, annual savings for the region were USD 1.5 billion based on total regional fuel volume.
Meanwhile, the fall in fuel prices was in the order of USD 50 per barrel (representing a 45per cent drop in the underlying costs), but there were marked differences in the benefits gained by each country.
“These savings, coupled with innovative thinking and political support, could be invested in renewable energy and energy efficiency to reduce fossil fuel dependence,” SPC’s Deputy Director of Energy, Solomone Fifita, said.
For example, American Samoa, Samoa and Tonga enjoyed the benefits of falling fuel prices with very little delay because their respective fuel price regulation systems are adjusted monthly and directly reflect what is happening in the Asian supply market, Mr Fifita explained.
Fuel pricing regulation in these three countries is achieved after extensive negotiations with fuel suppliers to achieve fair and equitable pricing.
Fiji, although it regulates its fuel price with a similar system, only adjusts its fuel prices every three months. The country therefore experienced delays in realising the benefits from the price decline. Conversely Fiji is also sheltered from price rises for the next few months, Mr Fifita said.