Consumers of petroleum products should be paying an additional three pesewas per litre for the fuel they purchase at the various pumps from June 1, 2020.
According to the National Petroleum Authority, NPA, this follows an increase of the BOST Margin in the price build-up of petroleum products.
Currently, a litre each of petrol and diesel has a BOST Margin of 3 pesewas, but that has now increased to 6 pesewas.
In a statement issued by the NPA, it said the review in the price was approved by cabinet.
“We write to inform you of a review of the BOST Margin in the Price Build-Up (PBU) of petroleum products effective 1st June 2020. This is in line with a decision taken by Cabinet and communicated to the National Petroleum Authority (NPA) by the Ministry of Energy,” the statement said.
Earlier this year, the Managing Director of the Bulk Oil Storage and Transportation Company, BOST, Edwin Provencal, appealed to government to increase the BOST margin in the petroleum price build-up from 3 pesewas to 12 pesewas.
According to him, the current margin is inadequate to put the company in a strategic position to fix its equipment which are obsolete.
The BOST Margin has remained at 3 pesewas per litre since 2011.
In December 2019, it almost went up to 6 pesewas per litre, but the decision was quickly reversed following intense pressure on government by opposition parties as well as CSOs such as the Chamber of Petroleum Consumers (COPEC).
COPEC, IES back calls for an increase in BOST Margin
Also, Chamber of Petroleum Consumers (COPEC), and the Institute of Energy Security (IES), had recently backed calls from BOST for an increment in the BOST Margin in the petroleum price build-up from 3 pesewas to 12 pesewas.
According to them, if the Margin is increased, BOST can be in a better position to hedge its prices to ensure stability in fuel prices in the country.
Fuel prices to go up in 1st pricing window in June – IES predicts
Prior to the increase in the BOST Margin, the Institute of Energy Security, IES, had predicted an increase in fuel prices in the first pricing window in June. The Institute explained to Citi Business News that, per its analysis, it expects the prices of fuel on the domestic market to go up, and above April 2020 levels.
IES attributes this to the 23.25% surge in price of Brent crude oil, in addition to the 41.80% and 22.68% significant rise in the prices of Gasoline and Gasoil respectively on the international market.