Good news for motorists in the country, fuel prices are now at its lowest point in decades – petrol is now at SBD$6.85 per liter and diesel at SBD$7.27 per liter.
The spread of the novel Coronavirus across the world has seen the demand for crude oil drop significantly, in early March prices hit their lowest in nearly three decades.
Oil is the cheapest its ever been, demand is gone, and nothing will ever be the same. These are the facts in oil today that experts seem to agree on, although opinions may differ as to what will happen next.
"This is not a cycle. There will be no return to normal, at least in the short term,” wrote Peter Bryant, managing partner at business consultancy Clareo, recently.
He says that now that we have lower demand, it is likely it will stay that way for quite sometime.
"In order for demand in crude oil to recover to pre-crisis levels, industrial and transportation activity need to snap back to previous levels, and this is unlikely to happen within a year," Bryant said.
In the Solomon Islands the Price Control Unit that sits within the Ministry of Trade and Commerce regulates the pricing of fuel. The Price Control Unit assesses the current situation and sets the price that fuel will be sold by Markwarth and South Pacific Oil, the two main distributors.
A 15% sales tax is included in the final price of fuel. Other factors include exchange rates, landed cost and instore cost are often considered according to the Pricing Template.
Finance Minister Harry Kuma says that oil price is likely to drop significantly in 2020, and as an oil consumer the Solomon Islands will benefit from lower fuel prices and lower import fuel bills.
However, he said the downside is that government revenue will be affected.