After reaching an all time high of $SBD14.59 early last month, pump prices has now fallen to SBD$9.90 per liter of fuel in most fuel stations in Honiara.Prices are expected to decline further in coming weeks as plunging oil prices and a historic pullback in consumption by large economies such as the U.S continue to weigh in on the price of fuel.
Felix Bennie, who recently bought a taxi cab, said he has had to park his taxi at his sister's house as it is much closer to town. "I catch the bus home from her house at Rove...I live up near the border area in Naha," he said. Bennie said that he will continue this 'fuel-saving approach' "as there is no guarantee it will remain this way."
Despite the fall in fuel prices the Solomon Islands Chamber of Commerce and Industry (SICCI) say that those in the fuel retail sector could still be "forced out of business," because of how government influences local fuel prices.
"The government sets a top limit to how much fuel retailers can charge for their fuel per litre. The present limit allows for retailers to charge a retail price 50 cents above the price they purchase the fuel. From this margin of 50 cents per litre the retailer must then pay all costs, such as; electricity, water, staff wages, staff training, maintenance, insurance and finally tax on company profits," stated SICCI in a press statement.
"Due to inflation all costs for the retailer continually rise, whilst their gross profit margins stay the same. In actual fact the high oil prices this year mean that the fuel price has gone up, driving down demand, so the retailer sells less fuel, at the same profit margin per litre, with higher costs."
The Chamber has made a submission to the Ministry of Commerce, Industry and Employment, outlining the concerns it has over the current price control.