New Petroleum Prices for February & March 2016 ^Featured

All petroleum consumers are notified that wholesale/retail prices for all petroleum products continue to significantly decrease for the month of February – March 2016. The retail price for Diesel will lead the decrease by -19.15 seniti/litre to a new price of 185.94 seniti/litre. The retail price for Kerosene will also decrease by -17.32 seniti/litre to a new price of 120.19 seniti/litre. Lastly, the retail price for Petrol will decrease by -9.51 seniti/litre to a new price of 209.32 seniti/litre. All changes include consumption tax. Petroleum consumers may note that these product prices are the lowest since 2005.

The petroleum prices for February – March 2016 is mainly determined by the movement of FOB prices in the Singapore market based on January 2016 average prices of the daily published Means of Platt’s Singapore (MOPS) benchmark prices.

Crude oil prices fell below USD 30/bbl for the first time since 2004. This price pressure is likely to remain during 2016 as OPEC producers compete to maintain market share and there is plentiful supply. The Dated Brent averaged USD 30.69/bbl (19.7% lower than December 2015).

Comparing the January 2016 month average prices with December 2015, crude oil (Dated Brent) is down by USD 7.52/bbl (19.7%). Kerosene and diesel prices fell more than crude, down by USD 9.76/bbl and USD 10.70/bbl respectively due to a mild Northern Asia winter which added to the current supply surplus. Petrol prices fell less than crude due to strong demand particularly in US and Asia Pacific which is capping the price drop. The freight rate has reduced with the impact of lower bunker prices. However, the Tongan Pa'anga has weakened to US 43 cents/Pa'anga which has partially offset some of the decrease in international prices for local consumers.

On the outlook, crude prices (Dated Brent) rose during the last week of January and have settled just above USD 30/bbl in the first week of February. The market remains well supplied and with demand not rising as quickly as expected, there is still downward pressure. Product prices are expected to follow crude, although petrol prices may reduce relative to crude as refining margins are expected to decline for the current strong levels. There may be some improvement in diesel refining margins as these are at very low levels.

For further information please contact the Ministry of Commerce, Tourism & Labour at telephone 23688.

MCTL