Declared Price Monitored/Controlled Services

Fuel (Petrol, Diesel & Kerosene)

Under the revised pricing arrangements that commenced in September 2004 after the conclusion of the Petroleum Industry Pricing Review, [provide a link to the Issues Paper in the Publication Section], the price of fuel products (petrol, diesel and kerosene) in PNG is set at import parity pricing (IPP) reflecting pricing ex Singapore. Unlike the previous price control arrangements where prior approval was necessary, the Commission’s role now is to monitor (under Section 32(A) of the Prices Regulation Act) InterOil Limited’s administration of the IPP arrangements of fuel products refined at the Napa Napa refinery.

Apart from being mainly a monitoring process, the Commission’s role in as far as fuel pricing is concerned also involves some price control activities. Specifically, the wholesale and retail margins wholesalers and retailers of fuel products can charge are price controlled. The Commission also monitors freight charges that are factored into the final pump prices of fuel products.

Final IPP changes and other relevant data are sent to the Commission by InterOil Ltd at the end of each month. Upon confirmation of the data by the Commission the prices changes are then passed through to the final pump price incorporating excise duties, freight charges and GST. Domestic fuel prices in PNG are primarily influenced by world crude oil price movements, which have been on an upward surge since the second half of 2004. And domestic fuel prices have moved in the same direction during this period reflecting higher crude prices.

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