The Fijian Competition and Consumer Commission (FCCC) has determined the new regulated prices for refined fuel products, namely Unleaded Petrol, Premix, Kerosene and Diesel for August 2022.

The new prices come into effect from Monday, 1 August 2022, and are as follows:

New Approved Retail Fuel Prices
Motor Spirit – $3.67 per litre (VIP)
Premix – $3.47 per litre (VIP)
Kerosene* – $2.89 per litre
Diesel – $3.61 per litre (VIP)

Note:

*The price for Kerosene is the VAT exempt price.

The fuel price review in Fiji follows a one-month lag period, and as such August 2022 local fuel prices are based on imports made by fuel companies in June 2022.

Fuel Price Change Reasons

The fuel price in Fiji is impacted by movement in the Means of Platts Singapore (MOPS), international freight rates and foreign exchange rates. The changes in August 2022 local fuel prices are due to unfavourable movements in international market prices and freight rates for motor spirit, premix, diesel, and kerosene.

August 2022 local fuel prices are further impacted by the strengthening of the US Dollar (USD) against the Fijian dollar (FJD) on all refined fuel products based on June 2022 imports.

FCCC has no control over the fuel prices as prices are dependent on 3 variable factors – world market price for refined oil benchmarked by MOPS, international freight rates and foreign exchange rates.

Crude Oil Market

Fuel prices have increased sharply because the price for crude oil, which is used to make motor spirit and diesel, has gone up. The crude oil prices increased significantly in June 2022 due to the following reasons:

1. There was strong buying interest from refiners and high refining margins amid a tight light sweet crude market due to supply outages in June 2022, whereby demand outweighed supply of crude oil and this led to an increase in crude oil price in June 2022.

2. In addition to supply disruption in several regions, including Libya and Ecuador, low June 2022 and July 2022 loading programmes of several grades and a planned strike in Norway’s oil and gas sector tightened the supply outlook.

3. Tight oil product markets, particularly for middle distillates diesel, and the prospect of higher oil demand in China amid a gradual easing of lockdown measures along with signs of robust demand for road transportation fuel during the driving season added support to crude oil price in June 2022.

The crude market structure strengthened further in June 2022 in all markets due to the oil market perception of a strong global supply and demand balance, specifically in the short term amid several planned and unplanned oil supply outages.

The sweet and sour crude differentials continued to widen in all regions in June 2022 on the better performance of light sweet crudes compared to heavier crudes. The light sweet crude value remained supported by a tighter light sweet crude market and a high Brent-related risk premium.

Higher margins of light distillate products, specifically gasoline and gasoil/diesel compared to weaker heavy sour products like fuel oil, also contributed to a widening of the sweet/sour crude differential in June 2022.

Asian refiners are expected to continue negotiating with major Middle Eastern crude suppliers for an increase in third-quarter term supply allocation. The Organization of the Petroleum Exporting Countries (OPEC) had decided earlier in the month of June 2022 to raise crude oil production quotas for July and August by about 50% compared to recent months. However, Asian refiners remained concerned over the possibility that a significant portion of that incremental Middle Eastern supply may go to end-users in Europe.

Refiners have increasingly dwelled on the importance of securing adequate crude and other refinery feedstocks and looking to maintain high run rates to maximise middle distillate production during summer amid a rapid recovery in transportation fuel demand. These global economic factors in June 2022 contributed to the change in the local Fijian prices for refined oil products for which the prices will be effective from 1 August 2022.

LPG product prices will be released before the month’s end.

Feedback: jyotip@fijisun.com.fj