Newcastle upon Tyne England
Travellers have got several reasons to celebrate today with an announcement from the government and another from the private sector.
For motorists and for homes dependant on kerosene the substantial drop in the price of petrol, diesel and kerosene is very welcome.
The Prime Minister has announced decreases in retail prices for petrol by 13.4sene from $2.31 to $2.18 per litre, for diesel by 27.2sene from $2.27 to $2.00 per litre and for kerosene by 26.0sene from $1.98 to $1.72 per litre.
Accustomed as we are to a measly few cents drop in price, this news was a pleasant surprise and much appreciated surprise.
Living in hope as we do, perhaps this decrease may bring about a chain reaction and our power, taxi fares and other services might correspondingly become cheaper too.
However we are not holding our collective breath on that one.
According to experts in the field the answer to the sudden plunge in the price of oil is simple economics – supply and demand.
So while they may not be dancing in the streets of Venezuela, Nigeria, Ecuador, Brazil, Russia the Arab states and parts of America, we will take this as a win – for now.
However the industry has a long history of booms and busts and making predictions is always the domain of the overly confident.
But the signs of perhaps the biggest bust since the 1990’s, has been around for a while. According to a report by the Clifford Krauss in the New York Times, earnings are down for companies that have made record profits in recent years, leading them to decommission roughly two-thirds of their rigs and sharply cut investments in exploration and production.
On top of that, an estimated 250,000 oil workers have lost their jobs, and manufacturing of drilling and production equipment has fallen sharply.
The cause of all that, is the plunging price of a barrel of oil, which has been cut roughly by more than 60 percent since June 2014.
Prices have recovered a few times last year, but a barrel of oil has already sunk this year to its lowest level since 2004. Executives think it will be years before oil returns to $90 or $100 a barrel, pretty much the norm over the last decade which is good news for us.
To sum up, the history of oil is of booms and busts followed by more of the same.
Also adding another cause for celebration is confirmation that a third airline is definitely about to take to the air to and from our islands before mid year.
The announcement that Talofa Airways Limited is bringing in two Twin Commander aeroplanes from the United States is good news.
Despite two airlines currently operating in Samoa, Polynesian Airlines and Samoa Air, we have received many tales of difficulties booking flights to neighbouring Anerican Samoa. They range from having to book weeks in advance for a flight and then there is the extra question of limited freight allowances.
Obviously there is room for more flights and another airline.
And while we are familiar with the constraints of airlines being viable having lived through years of a long and chequered history of mismanagement and overspending, it is heartening to know that the new airline has the prudent, honest and experienced Taua Fatu Tielu involved.
This is a man of principle who not only drew the line and stuck to it when he was involved with the rampant excesses of the Electric Power Corporation, but he brought Polynesian Airlines back into the black with careful management.
And while that allegedly did not make him popular with those in power who were used to being blindly obeyed, again he stood his ground.