St Helena : St Helena Change in Fuel Pricing
Submitted by Saint Helena Herald (Public Relations Information Office) 08.06.2010 (Article Archived on 22.06.2010)
Exco has approved a new, more transparent methodology for setting the wholesale price of fuel.
Change in Fuel Pricing
Exco has approved a new, more transparent methodology for setting the wholesale price of fuel. The advantages of the new approach include a fairer allocation of the costs of running the Bulk Fuel Installation across petrol and diesel consumers, the closer matching of fuel prices to market rates and a faster administrative process for implementing fuel price changes. This will remove problems with the previous arrangements, such as the long delay between deliveries taking place and prices being adjusted, often requiring a larger eventual change.
The first application of this new pricing approach will take effect this week, when Solomons will announce a change to their pump prices. These price changes, which reflect not only the costs of the last tanker delivery of fuel, but also the revised BFI cost allocation, are the first changes in price since August 2009. In future, consumers can expect pump prices to be adjusted rapidly after each new delivery.
The wholesale cost of fuel on the island is made up of the direct cost of the fuel, the freight charge, duty and the operating costs of the BFI. Executive Council has agreed that the costs of operating the BFI will in future be recovered on a flat rate (pence per litre) rather than on a percentage of value basis. This makes the fuel price calculations clearer and simpler and will result in a small one-off adjustment to petrol and diesel prices.
It should be noted that any change to the price of diesel fuel supplied to the power station as a result of this new methodology will not of itself create the need to adjust electricity tariffs. Fuel deliveries to the St Helena Fisheries Corporation will continue to be at the landed cost (which excludes any element of the BFI operating cost).
Public Relations/Information Office
Office of the Chief Secretary
3 June 2010
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