Minister backs $25 million fuel contract

The Vice Chairman of the Tenders Board, Papali’i Niko Lee Hang, has backed the awarding a $25 million contract to Petroleum Products Supplies Ltd. (P.P.S.) to be Samoa’s sole bulk fuel supplier.  

The awarding of the bulk fuel contract to P.P.S. for the fourth consecutive time since 2003 had been the subject of criticism in Parliament this week by one M.P. 

Ministry of Finance documents published in early January show P.P.S.’ contract was awarded one year ago at a cost of $25,590,000. 

M.P. Sulamanaia Tauili’ili Tuivasa questioned whether having a market run by a single business led to stronger competition and better price outcomes for consumers.

"This [means they] monopolise the price of fuel and there should be consideration given to the number of vehicles in the country," he said. 

“We need another fuel company in the country to ensure there’s competition and the price of fuel is fair." 

But Papali’i, who is also the Minister of Works Transport and Infrastructure, said the awarding of the contract followed established procedure and did not result in worse outcomes for consumers. 

“There was no favouritism in the awarding of the contract. They [P.P.S] were the lowest bidder,” said 

“The tender for the fuel is for five years and the P.P.S. offered the lowest bid. End of story. There is nothing more to it, other than the fact that the P.P.S. bid was the lowest.

“If you look at the other Pacific Countries, Samoa pays the lowest in the fuel.

"And while the price of oil fluctuates, the P.P.S. does not charge us based on that, the contract of $25 million is all that we pay for five years".

A 2018 analysis of Pacific petroleum market for the first quarter of 2018 conducted by the Pacific Community found that Samoa has the second-lowest pre-tax prices for gasoline and diesel fuel in the region, behind Fiji.

The tender results document shows that a total of three companies entered bids for the fuel contract in 2018. 

Other companies to enter tenders include Pacific Energy Samoa and Samoa Fuel Products.

Papali’i said in the past there were three fuel companies in the country.

“The cost of fuel was significant, at the time the oil companies were playing with the prices and that has stopped since the implementation of the bidding process,” he said. 

The Petroleum Products Supplies Limited website says the company is privately owned and was established in 2002:

“In 2003, our company, in partnership with Shell Fiji Ltd, successfully bid for the sole petroleum fuel supply and distribution contract in Samoa.

“The contract is for five years and involves the offshore supply of bulk petroleum fuels to the country, management and maintenance of the fuel terminal and depots on behalf of the Samoa Government, and the local distribution of bulk petroleum fuels to all customers.” 

According to Ministry of Commerce Industry and Labour (M.C.I.L.) company records, the P.P.S. is owned and managed by Taimalie Charlie Westerlund. 

The Samoa Observer contacted Taimalie for a response to the comments raised by Sulamanaia on Thursday but was referred to P.P.S. management. There has been no response.  

The company listed by P.P.S. as its partner is Shell Fiji Ltd. 

A company of that name previously supplied fuel to at least five countries in the Pacific. 

But in 2006, the Fiji Times reported that its operations were divested in two separate transactions including the French multinational Total Oil. 

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