A new petroleum price order from the Commerce Commission, effective from this Thursday, has lifted the margin percentage on diesel to over 4 percent for the first time under this or the previous Bainimarama regime – a rise of more than a quarter percent. Although the margin on unleaded has reduced slightly from 3.99 percent before Christmas to 3.92 under the new pricing, the average of the two margins is now 3.97.
Twenty-seven days ago (when the December 20 order came into effect) the average margin was 3.88. It’s clear that the price at the pump needs to reflect the continued fall in global fuel prices (and any effect currency swings may have) so Fijileaks has no argument with the Commerce Commission moving quicky to issue a new set of orders.
But there is no economic rationale why the Commerce Commission have felt the need to raise margins again – just over three weeks after readjusting them upwards. There is also no economic rationale that explains their consistently raising fuel margins whether global oil prices were rising or falling over the past 18 months, when they spent the previous six and a half years keeping the mandate dprofit margin as low as possible.
The only rationale is the grubby politics of Khaiyum paying back Tappoos.
That Khaiyum is the apparent minister for everything in the Bainimarama government is thanks in large part to the Tappoo Group’s career-saving intervention in 2009, which saw the controversial Sigatoka conglomerate buy his $400,000-rated Berry Road property for more than $800,000 through a Tappoo investment vehicle. This saved Khaiyum losing the property as a mortagee default, which would have had consequences for his legal licence and his political career.
Which is why whis week’s generous January 2015 fuel price regime is a millions miles away from the pricing regime that Aiyaz Khaiyum was the minister in charge of before Tappoos took over the 16 fuel stations previously run by Carpenters. In July 2013 – the unleaded and diesel margins were 2.48 percent and 2.52 respectively, or an average of 2.5 percent. Less than a month after the September 2013 takeover by Tappoos, Khaiyum’s Commerce Commission issued a fresh set of petroleum orders that jumped the margins up to an average of 2.9 percent (3.09 and 2.71 for unleaded and diesel respectively).
And so it continues to this day.