After my visit to Taveuni in September, I raised with the authorities in Suva, two matters of serious concern to the people there but have yet to receive satisfactory answers to my enquiries. The fi rst: the people of Taveuni are paying 35c a litre more for their fuel than people on Viti Levu.
In comparison, the price in Labasa and Savusavu is only 5c a litre more. The second: Fuel bound for Taveuni is carried on truck tankers on board passenger ships — a practice which I consider is a safety risk and needs to be properly investigated. Both matters were raised with the authorities here — the Fijian Competition and Consumer Commission (FCCC) and the Maritime Safety Authority of Fiji (MSAF).
High cost of fuel on Taveuni
Understandably, the residents of Taveuni are incensed at having to pay 35c a litre more for their petroleum products vis a vis prices in Viti Levu, considering that consumers on Vanua Levu are paying just 5c more. Why such a huge discrepancy?
They feel the higher fuel costs are unjustifi ed and unreasonable. If they can ship taro to Suva for as low as 10c a kg why are they forced to pay 35c per litre more for fuel? On my return to Suva, I verifi ed the claims against the FCCC’s Fuel Pricing Order No.8 issued on August 28, 2020 and found that the complaint was generally correct.
My findings further revealed that in the FCCC pricing schedule Ovalau is listed with Vanua Levu when it is closer to Viti Levu. Taveuni, on the other hand, is close to Vanua Levu but is listed with the Outer islands which probably explains the huge hike in price.
I wrote to the FCCC seeking an explanation for this anomaly. I claimed the high cost on Taveuni was “unfair and totally unjustifi ed … it has to be rectifi ed to give justice to the consumers there”.
FCCC’s response
In response to my queries, FCCC issued a media release with the explanation that the difference in fuel price was determined by “the greater supply expenses like the cost of freight to the island”.
Its chief executive officer Joel Abraham added, “One of the major differences between the two markets is that Vanua Levu is volume driven, while Taveuni has access to a more limited volume”.
“As part of our role to secure effective competition in the market, we are also mandated to ensure equitable returns for businesses.” FCCC said it took into account various factors such as shipping costs, truck hire costs, wages, rent, depreciation and other operational costs before setting the price. Well, to most reasonable minded people, this is hardly a satisfactory response. It does not justify the huge disparity between the Vanua Levu and Taveuni prices.
A little background information is necessary here. Fuel of all types is delivered to Labasa by ocean tankers which off-load to tanks shared by Total and Mobil at Malau. It is then delivered by road to Savusavu and other parts of Vanua Levu with the oil companies obviously absorbing the transportation costs
In the case of Taveuni, fuel is taken by truck tankers on board the vessel from Viti Levu. The vessel also carries passengers and other freight.
It docks at Savusavu to pick up passengers bound for Taveuni before sailing to the island where it off loads the tankers. The vessel lays over for the night and brings back empty tankers to Suva on the return journey.
Outsourcing raises costs
Some three years ago, oil companies out sourced supply to a contractor which is using a local shipping company vessels to carry fuel in truck tankers to Taveuni from Suva. Since then Taveuni residents have been forced to pay the higher 35c a litre for their petroleum products. Taveuni has big oil storage tanks which were used in the past when fuel was taken directly to the island by ocean tankers. The cost of fuel then was the same as in Vanua Levu.
Why are these tanks not used now? Storage tanks are being used in Labasa and Savusavu so why not on Taveuni?
The root of the problem is clear: the oil companies have outsourced fuel supply on Taveuni to private contractors at the expense of the community.
Why has the commission allowed the oil companies to indulge in this practice instead of requiring them to supply fuel direct to the storage tanks on Taveuni via ocean tankers, as was the case before?
The FCCC should be mindful of the hardship its pricing policy is causing the people in the maritime provinces.
The oil companies too must remain conscious of their social responsibility and not engage in trading practices that hurt their consumers. I have met with FCCC offi cials to discuss the issue and am still awaiting their response to queries raised. Meanwhile, the residents of Taveuni continue to be penalised with higher fuel costs.
In my view, the FCCC should take a hard look at its fuel pricing template, and trading practices within the petroleum industry. I say this because oil companies are known to offer lucrative rebates to large corporate clients. They also spend huge amounts on advertising and sales promotion programmes.
I am informed that these can add up to a sizeable sum. One wonders whether there is an allowable limit placed by the FCCC on such expenditure for the purposes of price determination. It would be grossly unfair to consumers if the cost of such promotional activities is passed on to them in the form of higher fuel prices. I for one believe that we could be paying less for our fuel if the profit margins were kept at reasonable levels.
Carriage of dangerous, inflammable
This is a particularly serious issue concerning the safety of passengers on vessels that also carry truck fuel tankers. The vessels leave Suva wharf carrying passengers, fuel and other cargo bound for Savusavu and then Taveuni where the fuel is off-loaded.
I raised concern about this with the Maritime Safety Authority of Fiji and was assured by its executive chairman that the ship is compliant with the International Maritime Dangerous Goods (IMDG) Code “which authorises the safe transportation and restricted movement of certain grades of dangerous goods including fuel”.
He said the ship was “surveyed to meet the requirements of IMDG”. In my opinion, the MSAF statement of compliance is misleading. It says that this vessel is equipped with fire-fighting hydrants with hose, ventilation system and sprinkler system.
These are standard equipment that all vessels should be equipped with but they are grossly inadequate to contain any inferno caused by a combustion in the fuel tankers carried on board the passenger vessel.
I have sought advice on the issue from industry experts and have been informed that the carriage of dangerous goods, including explosives and infl ammable substances such as fuel on passenger carrying vessels is unsafe and should be prohibited, particularly in cases where the vessel is not specifically constructed for that purpose.
Their advice is that fuel for outer islands should be carried on open barges or by ocean tankers. We are dealing here with human lives which are placed at great risk in the event of an accident. I would be truly surprised if passengers are even aware that they are travelling on a vessel that is also carrying dangerous, inflammable cargo in huge quantities.
There are no notices on the vessel to indicate that it is carrying dangerous cargo.
I call on those authorising such practice, oil companies and its associates to be mindful of the consequences of their actions.
Likewise, the shipping company should be aware that its first responsibility is to the safety of its passengers. The carriage of fuel laden truck tankers should be prohibited on passenger vessels. The government and the relevant authorities must take immediate steps to stop this practice.
MAHENDRA CHAUDHRY is the former prime minister of Fiji, Fiji Labour Party leader and also general secretary, National Farmers Union. The views expressed are his own and do not necessarily refl ect the views of this newspaper.
