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Across the board fuel hikes effective Jan. 15

[graphic:API Energy.org]
Vehicle gas will see a 20¢ hike
fili@samoanews.com

Because of the increase in crude oil prices and transportation costs, the new maximum allowable price (MAP) or wholesale price of all petroleum products sold in American Samoa will see a major increase in fuel cost for the MAP, which goes into effect this week, according to the ASG Office of Petroleum Management (OPM) data.

“Increase in crude oil prices translate to an average increase of 17 cents per gallon in Base Price for diesel and 20 cents per gallon for gasoline, kerosene and jet fuel imported and sold in American Samoa,” OPM petroleum officer Sione Kava explained yesterday.

Additionally, the cost of transportation on all products also went up by three cents per gallon compared to last month’s MAP.

Kava further explained that the Base Price and Transportation cost makes for 54% of the MAP on gasoline sold on island.

For example, current retail for gasoline is $2.93 gallon — which means local motorists are paying:  $1.57 (or 54%) for Base and Transportation cost; 26 cents for the suppliers margin (16%); taxes, fees and rents 59 cents (or 20%); and retail markup 49 cents (17%), according to data provided by OPM.

“These costs are determined by the global market for American Samoa and the rest of the region for that matter have very little to do with it,” said Kava, who added that the fixed Fees, Rents, and Taxes imposed on the MAP by the American Samoa Government have not changed for many years and remain the lowest in the region.

Effective Jan. 15- Feb. 14, the new MAP for gasoline, jet fuel and kerosene will see a hike of 20 cents per gallon; ultra low sulfur diesel, which is used for boilers/generators at the Satala power plant, and in some school buses will increase by 19 cents; and a 17-cent hike for diesel fuel, including road diesel, commercial fishing vessel and other marine diesel.

Regarding the global market dynamics impacting local fuel supply, OPM provided a summary released recently by the American Automobile Association, which states in part that crude oil closed out the year 2016 posting the largest annual gains since 2009.

These gains, it says, can largely be attributed to the Organization of the Petroleum Exporting Countries (OPEC) agreement, a deal brokered by OPEC and non-OPEC countries to cut crude oil production in an effort to rebalance the global oil supply.

Additionally, this trend will continue to hold if participating countries adhere to the OPEC agreement.

However, a factor that would keep a lid on oil prices has been the growing US rigs count and the possibility of more output down the line that would offset the OPEC supply deal.