Mon, 24 April 2017
Last Updated: Mon, 24 Apr 2017 10am
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Reliability and safety linked to prices of petroleum products in the Pacific

Auckland, New Zealand – The petroleum sector of the Pacific Island countries and territories is an estimated USD 6 billion industry.

It remains a key driver of their economies and a major determinant of their energy security.

Recognising the need to enhance an understanding of the Pacific petroleum industry and the mechanics of the various factors that influence the prices of petroleum products, the Pacific Community (SPC) in collaboration with S & P Global Platts is conducting a week-long (20–24 March) regional petroleum industry workshop in Auckland, New Zealand.

S & P Global Platts is the lead provider of petroleum pricing data in the Asia-Pacific region.

Pacific Island countries and territories rely on Platts as an independent source of petroleum market data and benchmark prices for the verification of price submissions from petroleum companies.

The workshop will offer an opportunity to learn more about the use of the publications noting that a small error over millions of litres of fuel can be substantial loss to the consumers.

More importantly, it will provide an opportunity to discuss a more cost effective way of accessing these publications with possible fewer restrictions thereby allowing government authorities and major consumers like the power utilities to have direct access to these data and information for their fuel price setting, supply contract negotiations and verification purposes.

A repeat of SPC and Platts 2012 workshop which focused on pricing, this workshop has been expanded to emphasise safety and opportunities for collective regional actions in the petroleum sector. In terms of the latter, an example would be the chance for government officials and the industry to discuss opportunities for a transition to higher quality and cleaner fuels.

Subsidies on fossil fuels can be a barrier to the region’s renewable energy and energy efficiency effort, therefore phasing out subsidies on fossil fuel will be a topic for discussion.

In addition, this workshop is a lead up to the Third Regional Meeting for Energy and Maritime Transport Ministers in Tonga next month and therefore an avenue for matters raised and discussed to be presented at the ministers’ meeting.

SPC Sustainable Energy Adviser, Rupeni Mario, said, “petroleum is a fast evolving industry and the more opportunities we provide for the industry, governments, major consumers, pricing authorities and regulators to sit together and openly discuss safety, pricing and reliability issues, the better the understanding and outcomes for the consumers.”

“A recent fire incident in Samoa and a fuel shortage at Vava’u in Tonga demonstrated that safety in the industry and reliability of fuel supply are intrinsically linked to the negotiated price and adopted pricing methodology,” Mr Mario, said.

“SPC would like to acknowledge the contributions from Platts, Pacific Energy and Vital-FSM PetroCorp of the Federated States of Micronesia and South Pacific Oil of the Solomon Islands towards this five-day workshop,” he said.

In his opening address, Tonga Electricity Commission Chief Executive Officer, Hon. Lord Dalgety emphasised the importance of petroleum products in the economic and social development of Pacific Island countries and territories.

“Petroleum industry will continue to dominate but the governments of Pacific Island countries and territories, regulators, politicians, consumers need to understand the continuing market and note that there is no one regulatory model, which nations can easily adopt. Each nation must adopt the model they prefer, and fine tune it to their particular requirement,” he said.

South Pacific Oil Board Chairman, Gideon Zoloveke, acknowledged SPC and S & P Global Platts initiative in organising the workshop; bringing experts in pricing, safety, supply logistics and importantly providing a forum for networking on key issues that affect the Pacific Island countries and territories.

- SPC

 


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