Effective from midnight tonight, the prices of fuel and LPG will decrease.
When compared to the prices that were offered in September, the new prices outlined in a press statement today by the Fijian Competition and Consumer Commission vary between nearly 2% and 5%, with the biggest drop in the cost of premix, from $2.93 a litre to $2.77.
| Product | Current Price (until 30 September 2022) | New Approved Price (from 1 October 2022) | Price Change (Decrease) | |
| ($) | (%) | |||
| Motor Spirit | $3.12 (VIP) | $2.95 (VIP) | ($0.17) | (5.45)% |
| Premix | $2.93 (VIP) | $2.77 (VIP) | ($0.16) | (5.46)% |
| Kerosene* | $2.45 (VAT exempt) | $2.41 (VAT exempt) | ($0.04) | (1.63)% |
| Diesel | $3.09 (VIP) | $3.00 (VIP) | ($0.09) | (2.91)% |
| Product | Current Price (until 30 September 2022) | New Approved Price (from 1 October 2022) | Price Change (Decrease) | |
| ($) | (%) | |||
| 4.5 Kg Cylinder* | $16.13 ((VAT exempt)) | $15.83 ((VAT exempt)) | ($0.30) | (1.86)% |
| 12 Kg Cylinder* | $43.01 ((VAT exempt)) | $42.22 ((VAT exempt)) | ($0.79) | (1.84)% |
| Bulk** (Kg) | $3.32 (VEP) | $3.26 (VEP) | ($0.06) | (1.81)% |
| Autogas*** (Litre) | $2.21 (VIP) | $2.17 (VIP) | ($0.04) | (1.81)% |
| Note: *Cylinder price is VAT exempt price (VEx). **Bulk price is Wholesale VAT exclusive price (VEP). *** Autogas retail price is VAT inclusive price (VIP). |
FCCC statement on price change
The fuel price review in Fiji follows a one-month lag period and as such, October 2022 local fuel prices are based on imports made in August 2022 by fuel companies. FCCC has applied September 2022 Saudi Aramco Butane Contract Price (CP), while international freight rates and foreign exchange rates were based on August 2022 imports to determine LPG prices for October 2022.
Favourable fuel price change factors
Fuel price in Fiji is impacted by movement in the Means of Platts Singapore (MOPS), international freight rates, and foreign exchange rates. The major reason for the changes in local prices of fuel products in October 2022 is due to:
a) Favourable movement noted in the international refined fuel prices in August 2022, that is the price of motor spirit, premix, kerosene, and diesel decreased when compared to international refined fuel prices in July 2022.
b) Favourable movement is noted in the international freight rates of all refined fuel products, that is international freight rate also decreased based on August 2022 imports. c) Strengthening of the USD against the Fijian dollar on all refined products, however, the decrease in refined fuel price and international freight outweighed the strengthening of the exchange rate.
Crude Oil Market
Crude oil prices trended lower in August 2022, extending the previous month’s losses. The decline in crude oil prices was preliminarily driven by:
1. Selloffs in future markets which elevated market volatility.
2. Easing concerns about tightening market and oil supply shortage, specifically in Northwest Europe and the Mediterranean.
3. The OPEC Reference Basket (ORB) declined month on month in August 2022 for the second consecutive month.
4. Oil prices came under pressure in August 2022 due to a slowdown in buying interest, including from European and Chinese refiners ahead of the refinery maintenance season expected to peak in October 2022 and November 2022.
5. Availability of unsold cargo volumes for September 2022 and early October 2022 loading that had put downward pressure on spot prices and crude differentials, which declined sharply compared to the previous month’s prices.
6. Increase in inflation rates and the slowdown in demand from China.
The supply outlook improved due to several factors, including the return of Libya’s oil production, the expected higher North Sea crude supply for October 2022 loading, and sustained supply from the US Strategic Petroleum Reserves (SPR).
An increase in inflation rates and a slowdown in demand from China contributed to a decline in Brent crude oil prices in August 2022. The crude prices fell sharply, amidst heightened fears
of recession and demand destruction due to fiscal tightening and rising US-China tensions. Asian gasoline prices fell due to demand concerns in some Asian economies on credit and foreign currency issues and the weak gasoline market. These global economic factors in August 2022 contributed to the change in the local Fijian prices for refined oil products for which the prices will be effective from 1 October 2022.
Favourable LPG price change factors
The major reasons for the movement in prices for all LPG products in October 2022 in the Fijian economy based on September 2022 Saudi Aramco Butane CP and August 2022 international freight and exchange rate are due to the following reasons: a) Decrease in Butane Contract Price (CP) compared to the last review, from USD660/MT to USD630/MT, a decrease of USD30/MT or 4.55%;
b) Decrease in average international freight compared to the last review; and c) Slightly strengthening of the USD against the Fijian dollar, however, the decrease in Butane Contract Price and international freight outweighed the strengthening of the exchange rate.
Butane contract price movement
Saudi Aramco set its September 2022 butane term contract price at $630/mt, down by $30 per metric ton from August 2022. According to S&P Global, rising Middle East supply since May 2022, along with steady exports from the US and Africa ahead of winter, have dragged Asia LPG prices down in September 2022. LPG inventory with Middle Eastern producers has been building amid higher OPEC crude production, although this could change as OPEC and allies have decided to cut output quotas by 100,000 b/d for October at the September 5 meeting.
Qatar Petroleum and Abu Dhabi National Oil Company (ADNOC) have advanced loading dates to clear swelling inventory. ADNOC did not announce cuts or delays in October loading term nomination acceptances, rather loadings were advanced by five to ten days. ADNOC also advanced loadings for July, August, and September 2022 cargoes. Qatar’s acceptances of October 2022 loading nominations had most lifting dates advanced as well as Qatar was heard to have offered up to three October-loading spot cargoes, one of which was sold at a $30/mt discount to Saudi Contract Prices to China Gas, traders said, underscoring recent deep discounts of free on board (FOB) Middle East cargoes.
Kuwait Petroleum Corporation (KPC) regularly offered spot tenders in recent months and in early August sold 44,000 mt of evenly split LPG for October 7 to October 8 loading, at around $15/mt discount to October CPs, after selling a similar cargo for September 11 to September 12 loading. Saudi Aramco’s trading arm, Aramco Trading Company or ATC has offered to supply LPG at Cost and Freight (CFR) spot terms, which could be up to seven cargoes, on top of baseload volumes. For September loading, ATC offered three to four cargoes. ADNOC had also offered CFR cargoes via ADNOC Global Trading, an integrated downstream, marketing and trading company, offering shipping and storage services, which hired two traders.
Increasing Middle Eastern exports are consistent with January’s market projections of a 6.6% year-on-year increase in 2022 shipments, as competition for Asian markets intensifies amid growing supply from other producers. According to S&P Global, total 2022 exports from Qatar, the United Arab Emirates, Saudi Arabia, Kuwait, and Iran are estimated to rise to 38.9 million mt, from 36.5 million mt in 2021. These international market forces impacted the price of LPG products in the Fijian market in October 2022.
