MAY 22, 2020
FSMPC ANNOUNCES SECOND PRICE REDUCTION OF 2020
Pohnpei, Federated States of Micronesia – Vital FSM Petroleum Corporation (FSMPC) announces to its customers the second price reduction of 2020. The wholesale prices of diesel (ADO), unleaded gasoline (ULP), and dual purpose kerosene (DPK) decreased by fifteen cents per gallon (cpg) on Thursday, May 21, 2020.
FSMPC Chairman of the Board of Directors Mr. Faustino Yangmog commented, “The halt in economic activity due to the COVID-19 pandemic has caused significant changes in oil supply versus demand patterns. Prices dropped within the first quarter of 2020, and are slowly on the rise. Despite this, I am pleased that FSMPC is passing on this second set of price reductions to our customers, and I believe we will finally be able to see pump prices under $4.00 per gallon.”
Since the first price decrease in April, motorists across the FSM have seen pump prices drop by up to 25cpg, with gasoline prices as low as $4.00/gal in Kosrae (Senny’s); $4.05/gal in Chuuk (Susumu’s); and $4.10/gal in both Pohnpei (PITC) and Yap (YCA). In the greater Micronesian region, pump prices are as low as $3.28/gal (Guam), $3.89/gal (Palau), and $4.60/gal (Majuro).
International market prices for crude oil have drastically fallen since January. However, the U.S. Energy Information Administration https://www.eia.gov/outlooks/steo/report/index.php anticipates that crude oil prices will increase from the second quarter of 2020 and on to the end of the year, as “declining global oil inventories next year will put upward pressure on oil prices.”
From public hearings to private citizens voicing their concern, the FSMPC has witnessed within the past few months a growing interest in gas prices in the FSM. In April, the Pohnpei State Legislature – Committee on Public Works, Transportation & Communications (PWTC) called for a hearing with FSMPC Senior Management. FSMPC Chief Strategy & Investment Officer (CSIO) Mathias Lawrence and Chief Financial Officer (CFO) Johnny Adolph represented the Corporation, addressing the Committee’s inquiries on pump prices in Pohnpei versus pump prices in Guam; pump prices in Pohnpei versus the other FSM states; and price forecasting. CSIO Lawrence advised the PWTC Committee:
“As you’ve seen in international news, the world market prices for fuel have plummeted due to the substantial decrease in demand. Similarly, in the FSM, we observe a reduction in our sales volumes as a direct impact of the restrictions on air and sea transportation. We carry high levels of inventory as a strategic reserve. This inventory was purchased between 60 to 90 days ago when prices were still high. New cargoes are coming in each month at the lower international prices and we will be able to pass on these saving when we realize them. Still, FSMPC is reacting to the downward trend in international prices and has already implemented a series of price decreases. For your information, since January 2020, a reduction of over $0.75 per gallon has been passed on to the state utilities, and on April 21st, the first price reduction of $0.25 per gallon to gas stations.”
According to CSIO Lawrence, “Our wholesale and retail prices remain competitive, and on par with what you can observe in similar, small island nations with long supply chains.”
For inquiries, email info@fsmpc.com.