Thursday, 2 October 2008 6:31 AM

Petroluem and Energy Experts Meet to Progress Bulk Procurement of Petroleum Initiative

Petroleum and other energy experts will meet in Auckland on the 8 and 9 October in an effort to progress the regional bulk procurement of Petroleum initiative.

A key Pacific Plan initiative, it is aimed at consolidating the purchasing of petroleum by Pacific Island Countries in an effort to offset the damage to local economies by higher global oil prices which continue to affect Pacific economies at both macro- and micro levels.

"For the region's countries with little or no export based manufacturing and in particular, its smaller island states, the impact is devastating with reductions in gross national income of between 4% and 14% for every US$10 per barrel increase in fuel prices," says Jared Morris, the Forum Secretariat's Import Management Adviser.

The question of energy supply and energy security is all the more tenuous with the continuing divestment of multinational oil supplier operations from the Pacific, the exit of which has forced many national governments in the region to utilize scarce resources to mitigate short falls in supply and maintain costly infrastructure.

Among issues under consideration in Auckland will be a framework document, which if agreed to, offers a first step in seeing interested Pacific Island Countries on the path to procuring petroleum products not as single actors but as a consolidated market. Based on international experience such a move would produce considerable savings at the point of purchase.
"The approach is one that, if adopted, will see the unbundling of supply from distribution. This will relieve pressure on government resources but still maintain a space for private sector operators. Such a consolidation will work to better harmonize standards, legislation and supply chain efficiencies more generally," says Mr Morris.

The initiative could not be timelier, something recognized by Forum Leaders at their recent annual meeting in Niue. A topic of considerable focus during Leaders' discussions, the meeting will be attended by senior Forum officials, technical experts and private sector representatives. The meeting will be facilitated by the Forum Secretariat. Financial assistance to support the meeting is being provided by the government of New Zealand.

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