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Use down, conserving up, gas prices set to drop

The new maximum allowable price (MAP), or wholesale price, for all petroleum products sold in American Samoa will see a major drop, including an 18 cent per gallon decline in gasoline. The new MAP goes into effect June 16.

“I bring some great news for residents of the territory in time for Father’s Day this Sunday and I am very hopeful that this major price drop in petroleum products helps all of us during these times when there are so many financial obligations to meet,” said petroleum officer Sione Kava, with the ASG Office of Petroleum Management (OPM) which releases the MAP twice a month. “But please keep in mind that OPM does not control our local prices — the major changes are done from outside of American Samoa.”

Effective tomorrow, June 16, the new MAP for gasoline is $3.74 per gallon, a drop of 18 cents, says Kava, who noted that the current average retail price for gasoline in the territory is about $4.35 per gallon.

Kava said he has not heard yet from neighboring countries such as Tonga, Samoa and Fiji to make Pacific island price comparisons, but gasoline in Hawai’i is around $4.29 per gallon.

The cost in New Jersey — where there is no tax on gasoline — is $3.75 compared to American Samoa, which has an import tax, said Kava.

He also said that gasoline consumption so far in fiscal year 2012 (which officially ends Sept. 30, 2012) is over 400,000 gallons, which is less than the same time last year.

“Two main reasons explain this drop in demand — more and more gas efficient vehicles being used, and people are conserving,” said Kava.

The Associated Press reports that the average gasoline price was at $3.54 nationwide on Wednesday.

For jet fuel and kerosene, the new MAP is $3.69 per gallon, a decrease of 16 cents per gallon.

For diesel fuel, the new MAP has road diesel at $3.95 per gallon; boilers/generators (used by the Tafuna Power plant) at $3.63 per gallon; commercial fishing vessel diesel at $3.42 per gallon and other marine diesel at $3.56 — a decrease of 17 cents per gallon, said Kava.

According to OPM there will also be a 17 cent decrease per gallon for the Ultra Low Sulfur Diesel (ULSD), which is used for the eleven generators at the American Samoa Power Authority’s temporary power generation system (TPGS) in Satala, and the ULSD road diesel used by Education Department school buses.

Kava explained that the “world economic woes are becoming a blessing to us on the cost of fuel” and “people are conserving”. Additionally, as the big economies, especially China and India slow down, so does their demand for fuel, which resulted in the drop for crude oil and in return, a drop in petroleum prices.

“We see a significant drop in the price of crude from $135 a barrel in March to $85 a barrel this month,” he said and noted that Japan announced that it is turning on some of its nuclear powered generators after all plants were turned off following the Mar. 2011 tsunami, and speculators see a drop in demand from Japan again. 

“We [also] see a drop in transportation costs as more tankers are available for a decreasing demand,” he said. “As for the future, it’s anybody’s guess. OPEC (Organization of the Petroleum Exporting Countries) will be trying to meet its goal of keeping the crude above $80 a barrel.”


Kava will be attending the Regional Workshop on Petroleum Pricing next week in Suva, Fiji sponsored by the Secretariat of the Pacific Community (SPC). Since 2010, the Energy Programs of the SPC have been assisting member countries to review their petroleum pricing templates and pricing practices.

“This exercise has resulted in savings of millions of dollars to SPC countries. More importantly, this exercise has identified the need to immediately provide support to member countries to better appreciate the petroleum industry and all the drivers and mechanics that set or influence the price of petroleum products,” said Kava.

Platts, a division of the McGraw-Hill Company, is the leading publisher of petroleum pricing data in the Asia-Pacific region “which we rely on as an independent source of petroleum market data for the verification of price submissions from the oil companies,” he said.

Platts and SPC have agreed to join forces and put together a regional workshop on petroleum pricing, he said.

“Although American Samoa is not an SPC member, it recognizes that American Samoa is a very important and major player in the oil company’s business in the region. I will have access to experts in the field that would normally not be available to us here,” said Kava. “I will also learn from other jurisdictions around the region on concerns and solutions to similar issues in the industry. After all, it is the same supplier that supplies us all.”