Petroleum prices have dropped since 18 October, and will remain through November, as approved by the Tonga Competent Authority (TCA). The monthly average product prices dropped for the third consecutive month, down approximately 8% in September.

The overall wholesale petrol price decreased by 13.65 seniti per litre, while kerosene and diesel prices dropped by 15.48 seniti per litre and 16.97 seniti per litre, respectively.

The retail price of petrol for Tongatapu was decreased by 10 seniti per litre while the retail prices of diesel and kerosene were decreased by 15 seniti per litre.

Consumptio tax was included in all price changes.

These drops were due to a combined impact of the international price drop and a reduction in freight cost, stated the Ministry of Trade and Economic Development (MTED).

September-October prices declined

Crude oil prices fell during September, reaching as low as US$70.61 before closing the month at US$71.70/bbl. The average price for Brent crude in September was US$72.75/bbl, a 7.8% decline compared to August. With crude oil prices easing during the month, product prices fell between 6-9%.

Chinese refiners have increased jet fuel exports, causing refining margins to fall to historic lows.

Diesel prices and refining margins were most affected, as a rare export from the US to Singapore added more supply to the region. Petrol refining margins also declined as China issued larger-than-expected export quotas, alleviating fears of a petrol supply shortage in regional markets.

“Despite continued attacks on shipping that have forced vessels to take longer routes, supply chains have adjusted without significant price volatility.”

“A weakening Chinese economy, though still showing some small growth continues to provide short-term support for the crude tanker market. However, longer-term growth opportunities will need to be found. Freight rates for Medium Range tankers in the Asia-Pacific region stabilized but were still down by a further 5.7% on a monthly average. The Tongan pa’anga has been steady against the US dollar and the Fijian dollar," stated MTED.

Meanwhile, the mid-October 2024 price change was based on the September 2024 average of published daily Mean of Platts Singapore (MOPS) benchmark prices for product prices and freight, along with that month’s exchange rate. The recommended wholesale prices have been calculated using 2023 Annual Review decisions approved by the TCA on 10 August 2023.