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New Petroleum Prices for February - March 2013

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19 February 2013, The Competent Authority has approved the new petroleum prices for February – March 2013 to be effective from Monday 18th February 2013 and therefore wish to notify the public accordingly.

Wholesale and Retail price for Diesel, Kerosene and Petrol for February – March 2013 have increased compares to the price approved by the Competent Authority Committee for January- February 2013. The retail prices for February- March 2013 for Petrol have increased by 5.49 seniti per liter to $2.84 seniti per litre (equivalent to 1.97% increase), Diesel have increased by 4.89 seniti per litre to $2.93 seniti per litre (equivalent to 1.70% increase) and Kerosene have increased by 4.50 seniti per litre to $2.32 seniti per litre (equivalent to 1.97% increase). All changes including consumption tax.

Petroleum price for February – March 2013 is mainly determined by the movement of FOB prices in the Singapore market based on January 2013 average prices of the daily published Means of Platt’s Singapore (MOPS) benchmark prices. Recommended wholesale prices have been calculated using the Tonga Fuel Price Template (TFPT agreed and issued during the 2011 Annual price Review.

The increase in the price of Kerosene, Diesel and Petrol for February-March 2013 is attributed to the following reasons:

- Crude oil price reaches a three month high in the last week of January partly in response to signs of improving global economic conditions. The Dated Brent benchmark average US$113/bbl in January, about 3% higher than December 2012.

- Dated Brent has broken above its recent band of US$110-114/bbl in January supported by positive economic data, unrest in the Middle East, and tightening product supply with refinery maintenance in all regions. In addition in recent months Saudi Arabia has reduced crude output saying the market is well supplied and their customers are not requesting any more. As with the price trend seen last year, it will probably take Saudi Arabia to reserve some of that recent production decline for prices to trend down again.

- Product prices also increase relative to crude with colder conditions in North Asia and signs of stockpiling ahead of extensive refinery maintenance planned for later this year. Comparing January month average prices to December 2012, petrol prices were up by US$4.18/bbl, with kerosene and diesel up by US$3.40/bbl and US$3.64/bbl respectively.

- The Tongan Pa’anga was relatively steady against the US dollar so the increase in product prices fed through to an increase in local price.

- Although headline Worldscale rates increase in 2013, the market benchmarks adjust to reflect these new rates. For January pricing the freight market has weakened, resulting in a decrease in the overall freight component in this month’s prices, and offsetting some of the increase in the benchmark prices.

The net result is an increase in all three product prices. The wholesale price for February – March 2013 for Petrol leads the increase  by 5.49 seniti/litre (2.09%), followed by the Diesel and Diesel for Power by 4.88 seniti/litre increase (1.79% & 2.41% respectively) and kerosene slightly increase by 4.50 seniti/litre (2.09%). All changes including consumption tax.

ENDS

Issued by the: Ministry of Commerce, Tourism & Labour, 2013

 

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