The Fiji Trades Union Congress has publicly challenged the Fijian Competition and Consumer Commission’s April 1 petrol price determination, saying the increase was unjustified and accusing regulators of failing to explain how the Middle East crisis should affect fuel already in the country. FTUC national secretary Felix Anthony said on Wednesday the commission and Government were asking Fijians to pay far more for fuel that, he argued, was largely purchased before the recent global price spike.
“We totally understand the need for restraint in the use of fuel and the measures outlined in the Government’s press release. But the massive increase currently imposed is totally unjustified,” Anthony said, warning that selling pre-war stock at higher retail prices would amount to a windfall for oil companies at the expense of workers and households. He urged the FCCC to be transparent and publish the calculations behind its decision, saying regulators “cannot just grant approval and sit pretty” without explaining the basis for the rise.
The Government has defended the April adjustment, saying not all fuel being sold was bought at earlier, lower prices. In a response issued yesterday it said fuel for April had already been procured at higher global rates and that contracts for May and June shipments had also been secured at elevated prices amid continuing international uncertainty. The statement noted that until shipments depart and arrive, supply cannot be guaranteed.
Government figures cited in the reply were striking: fuel companies are said to be absorbing losses of more than $1 per litre on April supplies, and the landed cost of a single shipment had risen from about $12 million to roughly $30 million. Officials said the recent retail price change was intended to reflect “replacement cost”—the price of securing the next shipment—so suppliers can lock in May and June deliveries without incurring further losses that could threaten national supply.
The dispute has also drawn comment from senior international economist Kishti Sen, who told The Fiji Times the April 1 prices “that came after the March review should not have factored in the March rally in crude prices” and instead ought to have been based on February crude prices, consistent with the FCCC’s usual review methodology. Sen’s observation suggests a departure from the commission’s prior approach for this round of pricing, a point FTUC and other critics have seized on to demand clearer justification.
The controversy comes against a backdrop of heightened global fuel price volatility following the Middle East crisis. The FCCC is responsible for reviewing and approving retail fuel prices in Fiji, and it says retailers should price on replacement cost to ensure continuity of supply. FTUC, however, maintains that where retail stock was bought at earlier, lower prices consumers should not shoulder a margin driven by future market expectations.
The Government acknowledged the impact of higher pump prices on households and said financial mitigation measures were being developed to cushion families. Meanwhile, trade unions and economists are calling for the FCCC to release the data and calculations behind April’s determination so the public can see how procurement timing, landed costs and the replacement-cost principle were applied in this instance.
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