NEWS

Fuel, LPG Prices To Increase In September

The new Fuel and LPG prices comes into effect from Wednesday, 1 September 2021 and are as follows...
31 Aug 2021 12:05
Fuel, LPG Prices To Increase In September
James Robin fill up fuel for a cutomer at a Total Service Station iin Suva . Photo: Ronald Kumar.

The Fijian Competition and Consumer Commission (FCCC) has determined the new regulated prices of Unleaded Petrol, Premix, Kerosene, Diesel and LPG for September 2021.

The new Fuel and LPG prices comes into effect from Wednesday, 1 September 2021 and are as follows:

Retail Fuel Prices
• Motor Spirit from $2.46 to $2.54 per litre, an increase of 8 cents per litre;
• Premix from $2.08 to $2.15 per litre, an increase of 7 cents per litre;
• Kerosene from $1.63 to $1.55 per litre, a decrease of 8 cents per litre; and
• Diesel from $2.05 to $2.06 per litre, an increase of 1 cent per litre.

Retail LPG Prices
• 4.5kg Cylinder from $13.78 to $15.19, an increase of $1.41 cents per 4.5kg Cylinder;
• 12kg Cylinder from $36.74 to $40.51, an increase of $3.77 per 12kg Cylinder;
• 13kg Cylinder from $39.80 to $43.89, an increase of $4.09 per 13kg Cylinder;
• Bulk Gas from $2.60 to $2.86, an increase of 26 cents per kg; and
• Autogas from $1.74 to $1.92, an increase of 18 cents per litre.

The Fuel and LPG price review implemented by FCCC follows a one-month lag period, as such the September 2021 Fuel and LPG regulated prices are based on importations made in July 2021 by Fuel Companies and LPG Companies in Fiji.

Fuel Price Change Reasons

The price of Fuel in Fiji is impacted by the movement in Means of Platts Singapore (MOPS), the international freight rate and the exchange rate.

The increase noted in local Fuel prices for September 2021 are due to unfavourable movements noted in international prices for Motor
Spirit, Premix, Kerosene and Diesel and favourable movements in international freight rates for all refined products.

The gains from international refined oil prices for Motor Spirit, Premix and Diesel were further supported by strengthening of the USD against the Fijian dollar based on July 2021 imports.

Although the international refined price for Kerosene had unfavourable movement on local price of kerosene, favourable freight rates and weakening of the USD against the Fijian dollar had a favourable impact on local price of Kerosene in September 2021 based on July 2021
imports.

Crude Oil Market
The price of crude oil rose firmly in July 2021 due to the following reasons:
1. The physical market fundamentals strengthened on demand side; however declining oil inventories continued to support the oil prices in July 2021.
2. The crude oil market continued to be supported by strong oil market forces, primarily driven by robust oil demand growth outlooks and expectations of slow global oil supply growth, which pointed to a significant oil supply/demand deficit in the second half of 2021.
3. A strong driving season in the United States, improved road transportation fuels in Europe, firmed demand in China and a steady oil demand recovery in India – after the easing of COVID-19-related mobility restrictions – bolstered global oil demand outlooks.
4. Improved refinery intakes in major refining centres and encouraging global economic data, particularly in the United States, China and Europe added optimism to market sentiment.
5. Uncertainty about the global oil supply market also pushed crude oil prices higher in July 2021.
6. Crude oil markets entered a turbulent zone in the second decade of July with heightened volatility which were triggered by rising concerns about the rapid spread of the new COVID-19 Delta variant in several major economies and a broad selloff in US equity markets.

7. Crude oil prices however recovered slightly in the third decade of July and rose further towards the end of the month after investors turned more optimistic on the global oil demand recovery amid expectations that higher vaccination rates in major economies
would mitigate the negative impact of a resurgence of COVID-19 infections.

Speculation about a supply overhang after OPEC and non-OPEC producers in the Declaration of Cooperation (DoC) decided to voluntarily adjust their production. The global oil supply/demand balance continued to show a deficit in second half of 2021, despite announcement by OPEC and non-OPEC on upward output adjustments.

Oil prices were also sustained by declining OECD oil stocks, particularly in the US, in a sign of a continued rebalancing process.

These global economic factors in July 2021 contributed to the change in the local Fijian prices for refined oil products which will be effective from 1 September 2021.
LPG Price Change Reasons
The LPG price in Fiji is impacted by the movement in Saudi Aramco Butane Contract Price (CP), the international freight rate and the exchange rate.

The major reasons for the movement in prices for all LPG products in September 2021 in Fiji are due to the unfavourable movement of Saudi Aramco Butane CP and unfavourable movement in the international freight rate.

Unfavourable movement in Saudi Aramco Butane CP was further supported by the strengthening of the US dollar against the FJ dollar based on July 2021 imports.

LPG prices surged in July 2021 as demand tightened and global economies recovered from COVID-19 lockdowns amid huge roll out COVID vaccines in bigger economies, such as China, United States and European Nations.

Other countries also reportedly started to build up their inventories to prepare for their heating requirements during the winter season; hence, giving heavier pressure on LPG demand.

On the supply side, while the Middle East spot supplies from Qatar and Kuwait remain steady, Saudi Arabia cut acceptances of term cargo nominations for July as the Persian Gulf market faced tight supply due to plant maintenance at Saudi Arabia’s key refinery at Ras Tanura.

Traders also noted that July loading cargoes from the US showed signs of improvement, although the volumes were not ample enough to meet demand in Asia, thus keeping prices in the region firm.

These international market forces impacted the price of LPG products in the Fijian market.

Fiji is directly impacted by the world market prices for both refined oils and LPG. As such, any changes to the world market prices will be reflected in Fuel and LPG prices in Fiji.

The FCCC will conduct the next Fuel and LPG price review on 1 October 2021.

Feedback: rosi.doviverata@fijisun.com.fj



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