Home Niue Local Fuel Hike

Fuel Hike


Petrol Up by 5.6% Diesel by 4.3%

There is nothing like a little gobbledegook to baffle the citizenry.

In the official announcement on the latest increases in the price of fossil fuel the residents of the atoll were advised that the reason for the increase was because fuel prices have remained static since March 2013. Fair enough. Secondly a review of the retailer’s margin was due. Again, fair enough. The third reason was a review of the road user levy. Really? For what purpose, I hear the citizenry chanting in unison as they continue to navigate in and out of the potholes. The fourth reason is the gobbledegook – one of the reasons for the hike was due to the “implementation of the return on investment component”.

Gobbledegook notwithstanding the cost for a litre of petrol has gone up by 5.6% from $2.50 to $2.64 and diesel by 4.3% from $2.55 to $2.66. In anyone’s language these are significant increases.

The only petrol outlet on the island Central Services with cars lining up pending the increase in prices.

What remains a puzzle is this: the average price per barrel of Brent crude in 2013 was US$108.56. We can assume therefore that the price of $2.55 was based more or less on that. In 2014 the average price dropped to $99.03.

No movement in the local cost for petrol. In 2015 there was a dramatic drop to $52.35. No movement in the local cost. Last year 2016 it dropped to the lowest price in a decade to $43.55 but still no movement in the local price. The current average price per barrel of Brent crude is US$51.82.

The question to the state-owned enterprise responsible for importing the island’s fuel is simply this: if the price of crude has decreased since 2013 where is the logic in the increase?

Even taking into account increase in freight, currency fluctuation, inflationary pressures, Donald Trump, it is not easy to follow the logic. Forget the bureaucratic double-talk. Believe it or not most of the citizens of our fine little atoll will accept a reasonable explanation, but the “implementation of the return on investment component”? 

This latest increase will likely add another $30 or more the fuel bill for those travelling to work each day from Hakupu, Liku, Lakepa, Mutalau, Toi and Hikutavake. “This is simply too much at once” one motorist told us,  “public servants may be able to absorb it a little better. But for us in the private sector it is going to be a struggle.”  It is on the cards also that the cost for tobacco products will be increased soon – if not already.