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Wednesday, October 08, 2008

Regional experts meet in New Zealand to discuss bulk procurement of petroleum for Pacific Island countries

A regional meeting of energy and legal experts to consider, among other issues, the possible benefits of seeing Pacific Island Countries consolidate their purchasing of petroleum and petroleum products to offset the impact of the continuing rise of world oil prices got underway in Auckland, New Zealand today.

Governments around the region continue to shoulder the ongoing burden of ensuring energy security nationally. This continues to place high levels of stress on government service delivery.

“The public role in funding and maintaining infrastructure throughout the Pacific is already stretched and the loss of traditional private sector capital, through the continuing divestment of multinational oil companies from the region, will only exacerbate this issue over time,” says the Forum Secretariat’s Import Management Adviser, Jared Morris.

In the region’s smaller island states alone, the current accumulative commitment to maintain strategic oil reserves and core physical infrastructure to store, handle and distribute petroleum totals at present close to US$100 million.

While high prices have somewhat curbed domestic consumption, the exposure to further price spikes internationally and the lack of domestic alternatives to dependence on fossil fuels continues to threaten energy security in the region.

“The problem posed by challenges to energy security should not be underestimated. Imports of petroleum have an enormous impact on the balance of payments, subsidies, taxation, and the costs and revenues governments deal with. A failure to secure energy supply will affect all aspects of life in the region and the very viability of some countries,” says Mr Morris.

Energy consumption is often regarded as an important indicator of economic development. For households, access to different types of energy sources is a key indicator of living standards. The Pacific however continues to be predominantly dependant on petroleum for modern energy services. While alternative and renewable energy options represent the ultimate long term solution, important, significant and immediate gains can be achieved through greater efficiency and effectiveness in the way the petroleum sector in the region is managed.

The meeting will end tomorrow.

Source: PIFS

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