Prices decrease across the board for petroleum products in the territory
Pago Pago, AMERICAN SAMOA — “An oversupply of crude oil and a weak demand is causing a drop in the wholesale price of fuel,” declared Sione Kava, the petroleum officer with ASG's Office of Petroleum Management in releasing yesterday the new maximum allowable price (MAP) or wholesale price, effective Jan. 15-31, 2019.
Data provided in the new MAP shows another drop for all petroleum products sold in American Samoa.
According to the new MAP, it’s a 12-cent decrease in gasoline (or Mogas); diesel products such as road, boilers/generators, commercial fishing vessels and other marine diesel; and the ultra-low sulfur for road diesel and ultra-low sulfur diesel for boilers/generators.
For jet fuel and kerosene, it's a 10-cent decrease.
OPM will be conducting this week a survey of the local gas stations for the average gas price at the pumps for gasoline and diesel.
The OPM report points to the global market, which notes that decreasing demand for refined products is causing an oversupply in the crude market. And supplies have continued to grow amid low demand and low prices, and are seeing more declines in fuel price at the pumps.
Additionally, there is talk to reduce this oversupply of crude globally. OPEC and non-OPEC producers, including Russia, announced that beginning in 2019, they will reduce crude production for an initial six-month period. This move could drive crude oil prices up, and in turn drive gas prices higher in the New Year.
For American Samoa’s market, OPM says that following the global trend, the price of fuel sold by the refinery in Singapore — where American Samoa and the rest of the neighboring islands get their fuel —continue to drop, affecting the December MAP and has continued to this January MAP.
“The MAP has been kind to the Territory since December 2018 and for the beginning of 2019,” said Kava yesterday.
OPM reminds the community that oil is a volatile commodity. Therefore, fluctuations in the fuel market, can present a significant risk to both suppliers and consumers.
“OPM recognizes the importance of keeping up and better ahead of development in the petroleum industries and business in order to — maximize the benefit of a drop in the price and soften the effect of a sudden increase in fuel price,” the OPM report states.
OPM also explained that it recalculates the MAP once a month and is effective from the 15th of the month until the 14th of the following month. For December 2018 and January 2019, OPM decided to change the MAP twice a month to capture the decrease in the fuel price.
“This is the beauty of the OPM system. OPM Fuel Pricing Template was set up to be flexible so that we can make changes when it is necessary and appropriate,” said OPM.
This is compared to other Pacific Islands Countries and Territories (PICT) whose fuel prices calculations are set for 2 to 3 months. “As a result, prices that were set in November will not enjoy the cheap fuel of December and January,” said the OPM report.