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Petrol shortage ‘inevitable’

Friday 16 December 2022 | Written by Matthew Littlewood | Published in Local, National


Petrol shortage ‘inevitable’
fuel level indicator in reserve, without fuel. Fuel empty.

The chairman of the Price Tribunal says the shortage of petrol on Rarotonga is ‘inevitable’ under the current supply model, and will continue to be so until changes are made.

The issue has been ongoing since Tuesday, where suppliers Toa and Triad Petroleum reported they have been out of petrol.

It has been the second time in two months that Rarotonga has gone without petrol in several days.

However, Louis Enoka, chairman of Price Tribunal which regulates fuel prices in the Cook Islands, said it was inevitable that such shortages would happen and will continue to happen unless the distribution model changes.

“Business as usual is no longer business as usual,” Enoka told Cook Islands News.

“It’s a loading issue, simple as that. There just isn’t the right amount of supply arriving into the Cook Islands.”

Enoka said it had been aware of the situation for “several weeks” and had been discussing with the stakeholders ways to address it.

“The efficiencies of the current tanktainer model needs to be looked at, because currently it just seems to not be working from a supply perspective,” he said.

Asked about whether the stakeholders would consider a “tank farm” model, Enoka said it was an “interesting concept”, but “currently, we’re not in a financial position to do anything like that”.

“In a perfect world, something like that would be considered,” he said.

Enoka said the aftereffects of Covid-19, which “destroyed” the supply chain model, were still being felt across the board.

“We’re at the very end of the supply chain and we have to wear it. There isn’t much we can do under the current model. It simply is what it is,” he said.

In the November price order, the maximum allowable price for petrol in Rarotonga was set at $3, a drop of $0.39 from the September price order.

Enoka said he “couldn’t say” whether people taking too much advantage of the reduced prices was a factor in the supply running out.

“I just don’t have the numbers with me,” he said.

Toa Petroleum owner Brett Porter said on Thursday that the next ship carrying fuel is likely to arrive this weekend, and fuel should be ready for consumers by Tuesday.

“That shipment will contain enough petrol for two weeks’ supply on the island, but because there has been this shortage, and everyone will be filling up, I predict it will last about five days,” Porter said.

“Then we’ve got another shipment carrying another two weeks’ supply of petrol, and that has to last us almost a month, as there will be a late arrival of the next shipment.

“This is an issue in the national interest. Something needs to be done, and fast, because otherwise running out of supply will become the norm.”

Porter said it did not hold reserves at the moment, because to buy in bulk exposed them to too much risk on the international market.

“As a result, we’ve been working on a ‘just in time’ model,” he said.

“We took a major hit when prices spiked in June and July.”

Porter said Toa Petroleum wanted to consolidate its volume with Te Aponga Uira to better utilise the local coastal tankers.

Triad owner Chris Vaile did not respond to questions but issued a paid notice (see page 4) blaming Toa Petroleum for the crisis.