The largest national federation of trade unions in Fiji has questioned the Fijian Competition and Consumer Commission’s (FCCC) April 1 petrol price determination saying it fails to understand how the Middle East crisis impacts the current fuel stocks that were bought at prices that pre-dates the crisis.
Fiji Trades Union Congress (FTUC) national secretary Felix Anthony said while the Government had announced available fuel stock to last the country until May, its justification for the steep increase in fuel price that it would enable oil companies to buy future stock at higher prices “simply does not make sense”.
He said the fact was fuel bought at pre-war prices and sold at higher prices would be a windfall for fuel companies at the expense of workers and the populace.
“We totally understand the need for restraint in the use of fuel and the measures outlined in the Government’s press release. Bu the massive increase currently imposed in totally unjustified,” Mr Anthony said in a statement.
“Fuel purchased from abroad at a higher price would only then call for a revision of retail prices.
“The FCCC needs to be transparent and explain how it justifies the massive increase in fuel prices. It cannot just grant approval and sit pretty without explaining to the public how its decision was reached.
“You cannot increase prices of old stock based on future predictions.”
In response yesterday, the Government defended its stand saying it was incorrect to suggest that all fuel currently being sold was purchased at old prices.
“Fuel for April has already been procured at higher global rates, and supplies for May and June have also been secured at elevated prices, despite ongoing global uncertainty. Supply is not guaranteed until shipments depart and arrive,” the Government stated.
It stated fuel companies were already absorbing losses of more than $1 a litre for April fuel, and that a shipment of fuel had increased from $12m to $30m.
“The recent price adjustment ensures they can secure fuel for May and June without further losses that would risk national supply.’
It also maintained: “Fuel pricing is based on replacement cost, which is the cost of securing the next shipment. This is standard global practice to maintain supply.”
The Government said it acknowledged the pressure on families and confirmed financial mitigation measures were being developed to cushion the impact of the global fuel crisis.
Yesterday, The Fiji Times reported senior international economist Kishti Sen who said the April 1 prices that came after the March review should not have factored in the March rally crude prices, and instead should have been purely based off the February crude oil prices – based on the methodology the FCCC adopted for all its price reviews, except for this latest one.
