Fuel price likely to drop: Ain

By CLARISSA MOI
FUEL prices may drop due to the Coronavirus (Covid-19) enforced restrictions on travel, according to the Independent Consumer and Competition Commission (ICCC).
Commissioner and chief executive officer Paulus Ain said the Covid-19 pandemic could impact travelling and thereby reduce demand for fuel.
“Fuel is a strategic commodity with its prices greatly influenced by global geopolitical events and sentiments,” he said.
“Fuel prices may decline due to restrictions on travel because of the spread of the Coronavirus’ Delta variant.”
Ain added that since Papua New Guinea was a net importer of refined fuel and crude oil, the country was a price taker.
“This means, PNG does not decide fuel prices,” he said.
“Domestic prices of fuel in PNG are determined by world oil prices.”
The Independent Consumer and Competition Commission had advised that retail fuel prices for this month had increased due to an increase in the imported price for petroleum products. The petrol selling price for this month is K3.79, diesel at K3.28 and kerosene is at K3.01.
Ain said with the increase in fuel prices, public motor vehicles (PMV) should not increase PMV fares above the ICCC-approved fares as this was illegal.
He said with PMV fares, the ICCC did annual adjustments in line with movements in the general price level (Consumer Price Index) and the cost of fuel (diesel).
“However, the annual adjustments to PMV fares take into account the previous year’s movements in the general price level and cost of fuel.
“A monthly increase like what we observed last month will not significantly increase PMV fares next year, as monthly increases are averaged out during annual adjustments, which take place at the end of each year,” he said.