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Gas prices drop

By Samuela Loanakadavu
Tuesday, February 24, 2009

A DROP in the gas price on the world market has prompted two local gas companies to reduce their retail prices.

But the Consumer Council says the reductions have not gone far enough.

The price of LPG for motor vehicles dropped from $1.57 a litre to $1.44. And both Fiji Gas and Blue Gas reduced their 13kg cylinder charge from $41 to $39.50 on Viti Levu on Saturday.

Fiji Gas chief executive officer Harvey Probert said his company intended to adjust its prices depending on operational costs and the world price.

Blue Gas director Sanjay Punja said the main contributing factor to the price drop was the reduction in world market prices.

Consumer Council of Fiji chief executive officer Premila Kumar said the reduction was long overdue but did not go far enough.

"The mere drop by $1.50 for 13kg cylinder cooking gas and $0.13cents for LPG is greatly disappointing to consumers. The price differential between LPG and petrol is a mere one cent now that the unleaded fuel is sold for $1.45 per litre," she said.

The Council warned Fiji Gas and Blue Gas not to be complacent.

Mrs Kumar said consumers in Fiji were expecting a bigger reduction in the price of gas because the commodity's price was on a downward trend in world markets.

Gas prices are monitored by the Prices and Income Board but not controlled by it, with gas companies setting their own price through a competitive environment.

But Mrs Kumar says prices charged to consumers by the two gas companies seldom varied.

She questioned whether competition existed under such circumstances.

"There is no competition as both charge consumers the same price. When the price of gas was $41 for 13kg cylinder, some supermarkets were able to have a sale price of $34.00. From this observation, it is very clear then that the real price of 13kg cylinder sold by the two companies could be lower than $34.00 if the supermarkets are able to sell the cylinder for $34.00," she said.

Mr Punja said the price of gas changed every month and was expected to stabilise soon.

The new domestic prices will vary according to location.


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