The new maximum retail fuel prices have made petrol on Rarotonga cheaper but more expensive for people on Aitutaki.
Rarotonga residents will have to pay up to $2.61 a litre for petrol, a decrease in five cents from the previous maximum retail price, while prices on Aitutaki go up to $3.18 per litre – an increase of 25 cents per litre.
Price Tribunal chair Louis Enoka said it was because Aitutaki imported new fuel, where Rarotonga imported very little new fuel.
Imports on new fuel is more expensive because of the international sanctions placed on Russia following their conflict with Ukraine.
Enoka told Cook Islands News the petrol price on Rarotonga was still low because it had old fuel stocked that was bought prior to the increase in fuel prices caused by sanctions on Russia.
“So in essence, we are still enjoying the benefit of stock we currently hold at the old prices.”
For the rest of the Pa Enua, excluding Aitutaki, petrol prices dropped by five cents to $3.42 for the Southern group and $3.58 for Northern group.
Teina Bishop, owner of Aitutaki lagoon tour, Bishop’s Cruises, said Aitutaki had limited storage space for fuel which meant it had to buy new stock.
“We don’t have the volume of storage (like) in Raro,” Bishop said.
However, he said the prices have not gone up yet despite the increase made by the Tribunal.
Bishop said he does not think prices will reach the maximum retail price authorised by the Tribunal.
“We are still on our old stock, so our last tank. Our price will go up when we dump our new tank which is still an old stock,” he said.
“It will go up but it won’t be up to the level of what the Price Tribunal is asking because we are mindful of affordability.
“At the moment we’re at $2.90, we might just go up to $3 because of the pricing of our next tank. So we’re going to go tank by tank in terms of our pricing because if we follow the price control figures, it is way out of people’s means.
“Rising prices is one thing but having people have the purchasing power to buy is another factor.”
Bishop said the rising price of petrol would impact his cruise business because they didn’t have the volume of tourists needed on the boat to make it affordable.
“The volume of tourists is very, very low, so we have to be mindful of that.”
Bishop said at the moment the price of petrol was offset by the wage subsidy.
“But once the wage subsidy is over then the reality of costs of cruising kicks in.”
He said it was time for people to be mindful of their driving behaviour and adjust their lifestyle accordingly.
The Price Tribunal also made changes to the price of diesel which is five cents more expensive and LPG which is up three cents on Rarotonga. Rarotonga residents will pay a maximum of $2.46 a litre for diesel and $4.54 a kg for LPG.
Prime Minister, Mark Brown said: “The Russian invasion of Ukraine is an example of how external shocks can impact our own pricing of fuel even though we are far removed from the conflict.”
“There have been big fluctuations in the price of oil lately that has pushed retail fuel prices up in New Zealand.
“Fortunately, our Price Tribunal has provided a pricing framework whereby petrol prices at the pump are still cheaper than in New Zealand.”
Meanwhile, Brown said the Price Tribunal will increase what they review including other essential commodities.
Gabe Raymond, who is currently working with Bank of South Pacific as their finance manager, was appointed as the new member of the Price Tribunal.
Brown said: “Gabe has a senior finance background and brings a wealth of experience to the Tribunal and will no doubt be of great value during these challenging times.”