18 March 2013 The Competent Authority has approved the new petroleum prices for March-April 2013 to be effective from Monday 18th March 2013 and therefore wish to notify the public accordingly.
Wholesale and Retail price for Diesel, Kerosene and Petrol for March-April 2013 have increased compared to the price approved by the Competent Authority Committee for February-March 2013. The retail prices for March-April 2013 for Petrol have increased by 13.05 seniti per litre to $2.97 seniti per litre (equivalent to 4.6% increase), Diesel have increased by 4.69 seniti per litre to $2.98 seniti per litre (equivalent to 1.6% increase) and Kerosene have increased by 5.01 seniti per litre to $2.37 seniti per litre (equivalent to 2.2% increase). All changes including consumption tax.
Petroleum price for March-April 2013 is mainly determined by the movement of FOB prices in the Singapore market based on February 2013 average prices of the daily published Means of Platt’s Singapore (MOPS) benchmark prices. Recommended wholesale prices have been calculated using the updated Tonga Fuel Price Template (TFPT) based on the interim decisions made by the TCA following the issue of the draft report from the 2012 Annual Price Review.
The increase in the price of Kerosene, Diesel and Petrol for March-April 2013 is attributed to the following reasons:
· Crude oil prices increased last month with greater optimism over the state of the US economy, demand growth from non-OECD countries (particularly China) and continued supply restraint from OPEC Gulf countries. The Dated Brent benchmark averaged US$116.28/bbl in February, about 2.9% higher than January.
· The improving economic activity and scheduled refinery maintenance for the second quarter is cutting into crude demand. OPEC is also producing less crude than it did a year ago, on the expectation that demand will ease in the second quarter. This has led to tightened supply which is supporting products prices.
· Product prices increased more than crude buoyed by tightening supply because of refinery maintenance in all regions. Comparing February month average prices to January, petrol prices were up by US$9.70/bbl, with kerosene and diesel up by US$5.68/bbl and US$5.74/bbl respectively.
· The freight rate has weakened slightly and the Tongan Pa'anga appreciated against the US dollar which helped offset some of the increase in product prices; however the huge increase in MOPS price fed through to an increase in local prices.
The net result is an increase in all three product prices. The wholesale price for March-April 2013 for Petrol leads the increase by 13.05 seniti/litre (4.9%), followed by Diesel for Power and Diesel by 5.50 seniti/litre and 4.69 seniti/litre increase (2.7% & 1.7% respectively) and Kerosene increased by 5.01 seniti/litre (2.3%). All changes including consumption tax.
Crude prices fell in the first two weeks of March as a result of plentiful supplies (particularly in the US). The outlook for crude and product prices depends on demand from Asia and emerging economies balanced against additional supply particularly from the US. Chinese demand shows no sign of slowing and if that trend continues, along with the trend of declining US imports due to increased domestic production, China will overtake the US as the world's largest importer of crude oil.
Ministry of Commerce, Tourism & Labour