Big drop in fuel prices

Business, Normal

The National, Tuesday 10th July, 2012

THE strong value of kina against the US dollar has caused a significant fall in the price of petroleum products, according to Independent Consumer and Competition Commission’s chief executive officer Dr Billy Manoka.
New prices per litre are as follows: petrol K3.08 (27t decrease from K3.35 last month), diesel K2.64 (20t decrease from K2.84) and kerosene K2.53 (20t decrease from K2.73).
The ICCC received advice from InterOil that import parity prices (IPP) for this month for petroleum products would decrease for petrol, diesel and kerosene.
After  taking into account the changes in the IPP, exchange rates, and domestic freight rates in particular InterOil’s sea freight charges for the third quarter of this year, wholesale and retail margins for 2012 regulatory year, the domestic retail price for all fuel products of petrol, diesel and kerosene will decrease.
Manoka said the decrease in the IPP for this month was attributed by the decrease in the petroleum product prices represented by MOPS (Mean of Platts Singapore) as a result of the average decrease of crude oil price at the international market during June.
“Strong kina value against US dollars at the international market in the month of June has absorbed some pressure on the domestic prices of petroleum products,” he said.
“InterOil has calculated the IPP based on an interim pricing arrangement the MOPS prices quoted to InterOil by its overseas suppliers is used as the basis of calculating the domestic prices.”
Manoka explained to fuel suppliers and retailers that the commission only set the wholesale and retail margins on an annual basis while the IPP was set under InterOil Project Agreement.
“Retail prices at all other designated centers will change according to their applicable in- country shipping and road freight rates charged by oil distributors for the third quarter of 2012,” he said.
“The commission also monitors the domestic sea and load freight rates on a quarterly basis as set by the oil distributors under the current arrangement to ensure that the rates are reflective of the efficient costs of transporting petroleum products within PNG.”
Manoka urged all fuel suppliers and retailers to set their prices within July’s allowable indicative retail price levels.
“As part of the commission’s role in the enforcement and compliance, officers will conduct inspections to all service from July 8 to ensure that the petroleum products are sold at the approved prices.”