Scrutinise gas industry before price increase

10/09/2008 16:27

The Consumer Council of Fiji is calling on the Prices and Incomes Board (PIB) to scrutinise the gas industry in Fiji before thinking of approving any increase in the price of gas. The Council’s call comes following PIB’s announcement of a possible increase in the price of cooking gas from the current $41 (FS 10/9). Discussion surrounding the regulation of gas price in Fiji is still being deliberated on by the PIB, and hence, the Council believes that it is premature to announce any increase at this stage.

The Consumer Council has been pressing for the regulation of the price of gas in the country, as it maintains that there is no real competition in the industry with only two players in the market. The Fiji Gas and Petroleum and Gas Company (Fiji) Limited seem to be operating as a cartel type operation and competing less on their prices. Both companies charge the maximum retail price of $41 for the 13kg cylinder. Where is the competition in their pricing?

The Council is concerned that with the price of kerosene being the highest ever at $2.05 per litre, any increase in the price of cooking gas will further have a detrimental effect on the wallet of consumers. Consumers are already shouldering the burden of high food and fuel prices on their static incomes.  

PIB, in its comments said that an increase in the price of gas would reflect the current global price of the commodity. However, PIB should consider that the gas price in Fiji has only shown increases with no recall of a price reduction ever. Hence, when the commodity price was low globally, the gas price in Fiji remained at high, not reflecting the global market price.