The Price Tribunal has ruled that petrol prices on Rarotonga will drop from $2.32 to $2.02 a litre. Diesel will drop from $2.30 to $2.05 per litre, and gas prices reducing from $4.45/kg to $4.36/kg.
Aitutaki and other outer islands will also see a reduction in fuel and gas prices. But not to the same extent as Rarotonga, as their prices include freight, wharfage, boating, reefing, drum/container cost, evaporation and cartage costs.
The wholesale price for retailers is dropping to $2.04/litre for petrol, and $2.02 for diesel. Gas will wholesale for $3.41/kg.
Fletcher Melvin, the president for Price Tribunal, said the reduction was due to a trade war between USA and China, and an oil price battle between Saudi Arabia and Russia.
Then, the Covid-19 pandemic forced travel restrictions and lockdowns, grounding planes and closing factories around the world. This had reduced fuel demand.
“It’s good news for the consumers but it’s sad news for the world economy,” Melvin said. “It’s like a double-edged sword, this will surely be a relief for the consumers during these hard times but long term this is not a good indicator for the world economy.”
Cook’s Buses has been suffering major revenue declines due to the loss of tourists and the economic slowdown. General manager Danny Cook said news of reduced fuel prices came as a big relief for their business.
“This is a big help for the business on top of the wage subsidy and grants that we have got from the government,” Cook said.
“We have been impacted quite badly by this pandemic as most of our passengers were tourists. We had to reschedule our runs, reducing them to clockwise direction only from 7am to 6pm Monday to Saturday.”
The opening of schools came as a bit of relief for the Cook’s Buses and the reduction in fuel prices will provide further respite in their effort to return to “normal business” in the future.
Fletcher Melvin expects the prices to remain the same when the next Price Order is released in July unless “there is some major change in demand for oil”.