The Independent Competition and Consumer Commission (ICCC) has dismissed assumptions that fuel prices will continue to increase throughout the year.
ICCC Commissioner, Paulus Ain, said in a media conference today that based on its outlook of 2018, retail prices for fuel will be flat or fluctuate and not increase over the coming months.
He made the comments in relation to the price hike experienced across goods and services in the country at the start of January, and rumours that prices would increase throughout the year due to the excise duty.
Commissioner Ain said the recent price hike was not only a result of the introduction of the 13 toea excise duty announced by the Government, but other factors used in calculating the final retail prices of petroleum products which increased in January.
They include crude oil (Import Parity Prices), exchange rate, international freight rate, domestic freight ate, wholesale and retail margins and GST.
The implementations of the excise duty came at a time when all other factors used in calculating the final retail or pump price for the month of January were increasing.
“Crude oil increased 3.76 percent, Kina depreciated by 0.38 percent, international shipping freight rate increased by 1.8 percent, domestic freight (road and sea) increased by 1.3 percent, wholesale margin increased by 2.31 percent, retail margin increased by 3.29 percent, GST and excise duty by 13 toea,” said Ain.
“The 13 toea excise duty would have been adequately absorbed in the final retail price calculations if all the rates for the other cost factors decreased. Unfortunately these factors were increasing so the new excise duty had some impact in the final retail prices.
“However, fuel prices for the next 11 months can decrease if the other factors drop. And I dispel any perception or assumption that fuel prices will continue to increase.”
Commission Ain said at this stage, it is hard to make a fair prediction on retail fuel price movements but based on analysis done by global firms, petrol, diesel and kerosene may remain flat or fluctuate.
Meanwhile, the Commissioner has issued a warning to business houses not to take advantage of the current price increase in January.
“Over the next 11 months, retail prices changes will have some effect on the retail prices of goods and services in the country. Nevertheless it is our strongest view here at the ICCC that fuel price changes will remain flat or would be fluctuating and I discourage consumer perceived perception about fuel prices increasing over the years, consequently increasing the cost of goods and services.
“I discourage business houses and service providers from taking advantage on the consumers by unscrupulously increasing the price of goods and services.
“This has been the practice for some business houses and service providers, the ICCC will be working closely with key stakeholders to discourage such commercial behaviours,” he said.
(ICCC Commissioner, Paulus Ain, in today’s press conference)