BP REPLACES MOBIL AS COOK ISLANDS FUEL SUPPLIER

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By Ulamila Kurai-Marrie

RAROTONGA, Cook Islands (Cook Islands News, Nov. 24) – BP Oil has won the fuel tender for the country's largest single consumer, Te Aponga Uira, which operates the Rarotonga power station.

British Petroleum took over the one-year fuel tender, worth more than NZ$7 million [US$4.9 million] from Mobil on 1 November.

The Avatiu Valley power house consumes at least 7.7million litres of diesel every year. Te Aponga boss Apii Timoti says that the only tender was received from BP Oil, since Mobil was not in favour of the new pricing template that Te Aponga had drawn up for anyone supplying fuel to them. A template is a mechanism which sets the price of fuel, with a price tribunal approving applications for price rises.

"Mobil Oil did not reapply for the tender because they said they could not meet the requirements that we have in our template," Timoti says. "But we are happy with what BP Oil has given for this one year. We are keeping our options open and Mobil can also apply after the one year if they want to tender again."

The previous template, which Timoti refers to as "designed for the suppliers", was what Mobil used and this came under scrutiny in an Asian Development Bank-funded review report.

The template uses Singapore prices which are determined by using most recent cargo loaded by Mobil for Fiji. This year Mobil argued that this provided a consistent price and ensured that Cook Islands prices reflected regional trends both up and down.

The template designed by Te Aponga for their own supplier takes away that reliance on voyages.

The ADB report by energy consultant Alan Bartmanovich urged government to renegotiate the pricing template with the major supplier, Mobil, which he says determines the price of fuel in the country.

Bartmanovich said in an earlier interview that the changes to the template were long overdue.

"It's an outdated agreement that needed to be revamped, basically, but it was the Cook Islands government that had allowed it to go on for a long, long time," he said.

The ADB report has also proposed an independent national fuel terminal - which it says is in the interest of all Cook Islanders.

Meanwhile, fuel prices are expected to drop by December 1, when government is expected to introduce new price control mechanisms for the whole country.

December 5, 2005

Cook Islands News: http://www.cinews.co.ck/

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