Something good from the bad – fuel prices are falling thanks to covid-19
BY PETER ZOLEVEKE II
AT least one thing many would agree has come good out of the current covid-19 pandemic – fuel prices are dropping.
On Monday this week, US oil prices for the first time ever dropped to negative. And, with covid-19 still on the rampage around the world, prices are projected to continue plummeting.
Fuel is regarded as one of the ‘main costs’ in Honiara and across country. Vehicle owners, boat owners, sawmill owners and the list goes on, can attest to this.
Prices of services are also partly determined by the cost of fuel, from electricity to public transport, etc. The degree varies in each service. Overall, falling fuel prices is good news for the public.
The country’s major fuel distributors South Pacific Oil Limited and Markwarth Oil Limited reflected declines across all fuel categories since January this year.
“There are no fixed prices, monthly it changes and without latest experience in the past three months this year prices repeatedly record lower,” an insider from the SPO’s Sales & Marketing informed this paper yesterday.
“Every month the fuel price changes beginning each month. With the previous experience price has not been stable, and with this COVID-19 pandemic price remain lower.”
Consumer Affairs and Price Control Division, Director Geoffrey Dan Hou’ua confirmed the price lowering.
“Changes from each month and current month drops according to our calculations. Within the template all costing are included that’s when we determine whether prices go up or down depending on the MOPS.
Petrol retail price for April is $7.90 per litre – a drop of 50c from last month.
Similarly, Diesel retails at $8 per litre – a drop of 60c from last month.
Kerosene dropped by 50c from last month, now retailing at $7.50 per litre.
Oil companies submit monthly pricing template referred as Mean of Platts Singapore (MOPS) OR World market to the Secretary of the Price Advisory Committee (PAC) which its functions is to keep under review prices or charges for sale of goods or supply of services.
“Submission normally comes monthly on 23rd, 24th or 25th and that is around this week so we can identify the new price for May,” Secretary PAC Edward Bamu explained.
“The wholesale price will be forwarded to the two suppliers and the retail price to the service stations.
The total petroleum fuels market is about 150-200 million litres per annum.
SPOL is approx. about 44 percent of 80 million litres. MOL is 100 percent regulated.
Meanwhile, SPO and Markwarth are receiving petroleum from the Singapore based refinery, and so far reportedly all retail suppliers in Honiara have similar price on Petrol ($791) and Diesel ($8.06) which are the main commodities.
Being a price taker, Solomon Islands are vulnerable to such external shocks.