Local motorists can expect a future drop in the cost of petrol after the global market for oil has led to drastic price falls.

As most parts of the world remain on lockdown as preventative measures for the coronavirus pandemic, demand for oil is plunging. 

Prices are dropping accordingly. 

In America on Tuesday, the cost of barrels of oil fell by up to one-quarter. Some May oil contracts traded on the same day fell into negative territory, sending the price of a barrell to below zero for the first time in history.

The Ministry of Finance's Chief Executive Officer, Leasiosio Oscar Malielegaoi, said the reduction means Samoan citizens can expect to save money when buying fuel in the future. 

But the reductions are unlikely to be seen by consumers in the short-term. 

Leasiosio said the Government is not in any position to immediately take advantage of the drop in oil prices as all tanks in Samoa are already full.

“All our tanks (Diesel, Petrol, Kerosene, Jet Fuel) are full," he wrote in an email to the Samoa Observer.

“The last shipment was here last week and we had filled up all our storage tanks (Sogi, Matautu Wharf, Salelologa Savaii), including reserve tanks.

“We are confident that we have sufficient supplies to last until the next shipment arrives next month."

The cost plunges are being driven currently by the world running out of places to store oil being produced by the industry and comes despite a deal by Saudi Arabia, Russia and other nations to cut down on production.

At the moment, the retail price for petrol is $2.55 sene per litre. Diesel costs $2.52 per litre while kerosene costs $2.13 per litre.

The broader wholesale price in Samoa has been decreasing since February.

The coronavirus' impact on the global oil market prices are predicted to be worse even than the 2008 global financial crisis which also recorded a massive plunge in demand and prices.