Fiji’s fossil fuel need is led by demand in premix fuel, a recent study has found.
The study, released by Deputy Prime Minister and Minister of Finance, Professor Biman Prasad, Paresh Narayan of Monash University and chief executive officer of the Fijian Competition and Consumer Commission (FCCC) Joel Abraham, showed premix fuel has a 54.8 market share.
“Premix is the market leader, contributing as much as 54.8 per cent of all price movements,” the authors stated.
“This is followed by oil price, which accounts for 33.9 per cent of price movements.
“The least contributors to market price are motor spirit (5 per cent), diesel (4.4 per cent), and kerosene (1.6 per cent).”
Their research, titled “Understanding Price Leadership in Fiji’s Energy Market”, is based on data from FCCC in a monthly period from January 2011 to March 2022. “Targeting the price leader will produce a more effective policy of price control,” the report stated.
“This is not the only advantage.
“Amongst a list of price movers, if a ranking of price movers is identified, the ranking itself can be utilised to decide on the magnitude of price control.
“In controlling prices, given that the objective of FCCC, the price regulator, is to maintain price stability and enhance consumer and producer welfare, pricing-related policy should pay greater attention to the market leader—that is, premix price.
“It could also mean that if price cannot be regulated in the current market due to volatile international price movements in crude oil prices and other factors beyond the control of FCCC, alternatives such as renewable energy should be considered and adopted.
“This will also support the global and national objective of addressing the issue of climate change mitigation and adapting to the new imperatives, such as the transition to net-zero, demanded as part of addressing the climate change challenge.”
