The Independent Consumer and Competition Commission (“ICCC”) is conducting another Petroleum Industry Pricing Review (Review) to determine appropriate wholesale, retail and drum-filling margins for declared petroleum products (petrol, diesel and kerosene) for the next regulatory period (2020-2024).
ICCC Commissioner and Chief Executive Officer, Paulus Ain said the current regulatory arrangements for these declared petroleum products will expire on 31st December, 2019.
“Being the administrator of the Prices Regulation Act (PR Act), the ICCC is responsible for setting the annual wholesale, retail and drum-filling margins, and the monthly retail prices for petrol, diesel and kerosene in the country.”
Commissioner Ain said some of the broader issues that will be considered as part of this Review will include, but are not limited to, the following:
- Identify any competition issues in the (1) refining market, (2) the wholesale and distribution market (3) and the retail market for refined petroleum products over the last five years;
- Review the current monitoring arrangements of the IPP, and domestic road and sea freight; and decide on an appropriate form(s) of regulation for the next regulatory period, should regulation continue;
- Review the current cost build-up of fuel products (petrol, diesel and kerosene) from the Napa Napa refinery through the domestic distribution networks to the retail outlets and identify any inefficiencies that can be addressed as part of this study;
- Review and assess the industry participants’ fixed asset registers to determine an appropriate Regulatory Asset Base to apply in the next price path period for distribution and retail assets;
- Review the Weighted Average Cost of Capital used in the 2016 Final Report and recommend changes where necessary.
- Review and assess budget and forecasted information provided by industry participants relating to sales and demand, revenues, operating and maintenance expenditures, and capital expenditures for the forthcoming regulatory period to ensure recovery of efficient costs, at a given level of service quality;
- Based on the respective forecast revenue requirements, determine the appropriate Wholesale, Retail, and Drum filling margins for petrol, diesel and kerosense for the next regulatory period.
A Public Notice advising of the Review was published in the newspapers and the Close of Receipt of Comments on that Public Notice is on April 30th.
A Draft Report will be releases on June 28th with the Close of Comments on this Draft Report on August 30th. ICCC will release a Final Report on the Review on 30th September.
Commissioner Ain said the ICCC endeavours to conduct this Review in an open and transparent manner before making its final determinations.
“The ICCC encourages the general public, interested stakeholders and fuel wholesalers and retailers to participate in this Review process by providing comments or written submissions on the issues outlined in this Public Notice which might be relevant for the ICCC to consider as part of this Review.”
All submissions received will be treated as public information unless certain information is designated as “confidential”.