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.

Public Motor Vehicles (PMVs) and Taxis

PMV and taxi rates is also a declared service under Section 10 of the Prices Regulation Act (Chapter 320) for price control purposes. The Commission is the authority responsible for reviewing and granting fare increases for PMV and taxi fares for all routes throughout the country.

In January 2005, the Commission granted an interim fare increase of 20 toea to apply to adult commuters for PMVs operating within the National Capital District (NCD). This increased the fares for adult commuters in NCD to 70 toea from 50 toea. High school and community school students are to still pay the old fares of 30 toea and 20 toea respectively. As stated, this was an interim measure pending a major review into the PMV and Taxi Industry in the country to thoroughly ascertain all PMV and taxi fares for all routes in the country.

Click here for Public Motor Vehicles (PMVs) and Taxis Review

Water & Sewerage

In light of legislative changes relating to the introduction of the Independent Consumer & Competition Act 2002 in conjunction with amendments made to certain provisions of the Prices Regulation Act (Chapter 320), a review into water and sewerage rates was initiated by the Commission in March 2004. Water and sewerage services are declared services under Section 10 of the Prices Regulation Act.

At the conclusion of this review in November 2004, the Commission‘s final determinations of the water and sewerage pricing arrangements for both Eda Ranu and the PNG Waterboard were released. For a period of five years commencing 1 January 2005 and concluding 31 December 2009, both Eda Ranu and PNG Waterboard will be able to adjust their average prices for water and sewerage services by a factor determined by the formula CPI+X. In 2005, Eda Ranu and PNG Waterboard adjusted their prices by CPI+11% and CPI+7.8% respectively. The CPI used here is the movement in the adjusted CPI (that is, excluding betel nut, tobacco and beverages). Eda Ranu and PNG Waterboard will advise the Commission in advance of proposed changes that they wish to make in accordance with the formula, and the Commission will confirm the accuracy of the calculations based on the operation of the determined formula.

The Commission will retain the right to seek adjustments to proposed new tariff rates should it observe that the adjusted rates for lower volume users (the ‘lifeline blocks’) are growing at unacceptable levels, although this will not prevent the two businesses from making their full adjustment across all tariffs in accordance with the determined price path. Stevedoring & Handling charges

These services are also declared services under Section 10 of the Prices Regulation Act (Chapter 320) for price control purposes. Providers of these services are required under the Act to seek the Commission's approval before any price change. The Commission undertake the comprehensive review into the stevedoring and handling industry in 2007 with the view to continue, terminate or alter the existing form of price regulation and if changes was to be made then what form of price regulation will apply then.