16th October, 2018 The Ministry of Commerce, Consumer, Trade, Innovation & Labour wishes to advise that the Tonga Competent Authority (TCA) has approved the new petroleum prices for October – November 2018 to be effective from Tuesday, 16 th October 2018.
Crude prices (Dated Brent) reached a four year high at USD83.64/bbl on 28th September, supported by the tightening of supplies from US sanctions on Iran and production disruptions in Libya and Venezuela. Dated Brent averaged USD78.53/bbl in September which was 8.6 percent higher than August.
Global oil demand is high, and this may ease as some countries look to reduce imports in order to offset the impact of rising prices (due both to higher prices and the strengthening US dollar). OPEC has increased production to compensate for the loss of Iranian crude and other OPEC members production disruption, although global supplies remain tight supporting crude oil prices.
While crude prices rose, product prices rose less than crude resulting in reduced refining margins for all products. Diesel prices were supported by refinery maintenance in Japan after the earthquake disrupted exports, allowing refiners to push up prices. Comparing the September 2018 month average prices with August:
- Crude oil (Dated Brent) was up by USD 6.23/bbl (8.6%);
- Petrol was up by USD 5.09/bbl (6.2%);
- Jet was up by USD 4.40/bbl (5%); and
- Diesel was up by 5.26/bbl (6%).
The freight rate has reduced slightly. The Tongan Pa’anga has continued to weaken against the US dollar and combined with higher international prices .
This month’s prices are further impacted by the increase in the ROI for physical assets to 15 percent after tax which was an outstanding decision from the annual review.
Overall this month, all product prices will increase significantly. Wholesale petrol, kerosene and diesel will increase by 9.46 seniti/litre, 8.30 seniti/litre and 9.75 seniti/litre respectively. Tongatapu Retail prices for Petrol, kerosene and diesel is 294.27 seniti/litre, 218.93seniti/litre and 302.00 seniti/litre respectively. For prices to outer islands, please contact our offices for details. All price changes include consumption tax.
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For further information please contact the Ministry of Commerce, Consumer, Trade, Innovation & Labour at telephone 7400105 or 7710092.