Fuel price drop, a relief

14/01/2015 16:24

The Consumer Council of Fiji welcomes the drop in fuel prices announced by the Fiji Commerce Commission in its first price review for 2015.

The latest FCC retail prices to come into effect tomorrow (15/01/14) sees prices for the main urban centers decreasing. Motor spirit will drop to $2.31/litre; diesel to $2.01/liter; premix outboard fuel to $2.18/litre and kerosene to $1.58/litre. LPG (gas) has also dropped with the 12kg cooking gas cylinder dropping by 41cents from $41.28 to $40.87 and auto gas by 3cents from $1.96 to $1.93.

Consumers are urged to be vigilant and ensure they are paying the regulated prices and they should immediately report on retailers who are charging higher than the FCC prices. Prices in areas outside the main urban centers, rural areas and in the outer islands will normally be higher than in the main urban centres.

Consumers should be relieved considering that 2014 was not a good year as it had some of the highest prices for fuel during the 5-year period from January 2010 to January 2015. For example, during this period the highest price for motor spirit was $2.63/liter in April-July 2014, diesel also recorded the highest price in 2014 at $2.39/litre at the same time.

The Council has maintained price lists from 2006 to date. The lowest prices consumers were enjoying were mostly in the 2009-2010 period. For example, motor spirit was at its lowest in the February 2009 price review at $1.45/litre. Kerosene went below the $1 mark in April 2009, but increased to $1.12 the following month, and has continued to increase since then making consumers fork out $1.93 per litre in 2011which was the highest price. The price drops in 2009-2010 can be attributed, amongst other factors to the drop in the world oil price around that period.

In the one year period from January 2014 to January 2015, the retail price has dropped ranging from 10.8% to 18.2%. World fuel prices have dropped by more than 50% since January 2014 (Brent Crude and WTI Crude*). However, domestic prices would be affected by other factors like transportation and storage costs, duty, exchange rates and other costs.

The highest fuel price drop during Jan 2014 – Jan 2015 was last month when the FCC price review on 19/12/14 saw prices drop by 6.22% to 8.19%.

Meanwhile, the Council believes that the downward movement in the world oil price and the drops in the local fuel prices should mean a general reduction in energy costs for consumers and businesses. Consumers expect that there should be some reduction in the cost of goods and services. We have noted that whenever local fuel and world oil prices increase, businesses raise the issue of cost of doing business. Consumers should do likewise when there is a decrease in energy costs.

*Brent and WTI (West Texas Immediate) is a grade of crude oil used as a benchmark in oil pricing.