18 Dec 2009

Cooks government stance on fuel use queried

12:11 pm on 18 December 2009

A lawyer for an oil company operating in the Cook Islands says while the recent out of court settlement with the state is a good outcome, the government needs to clarify where it stands on fuel consumption.

Triad Pacific Petroleum's solicitor, Tim Arnold, says mediation at the High Court means the government will not go ahead with the purchase of a fuel farm.

The out of court settlement sees the Cooks government pay Triad's legal costs of 52,000 US dolars and the owners TOA Petroleum will get 1.2 million dollars in compensation.

Mr Arnold says competition between fuel companies is important to avoid a monopoly and higher prices but he says the public is getting mixed messages from the government.

"The inherent contradiction between the government of the Cook Islands attempting to reduce the price of fuel in order to provide relief for the large numbers of four-wheel drives, six cylinder cars and gas guzzling outboards over here; and the message that the Cook Islands is putting to Copenhagen; it's a contradiction that needs to be resolved by the government at some stage."

Tim Arnold agrees with a government estimate of a potential saving of 7 million dollars by avoiding a lengthy legal case.

He says it is important all parties are still talking.