American Samoa Lowers Diesel Tax To Attract Tuna Vesselsff

Acting Governor Ipulasi Aitofele Sunia of American Samoa has issued an executive order waiving the excise tax on sales of diesel fuel to commercial fishing vessels.

Local law calls for the American Samoa Government (ASG) to levy a $0.035 cent per gallon excise tax on all imported diesel fuel.

ASG's move to waive excise tax on sales of diesel fuel to commercial fishing vessels was designed to encourage them to return to Pago Pago, after diesel sales to the fishing fleet fell by 50% this year.

“Our diesel sales have fallen significantly as fishing fleets are refueling at sea and elsewhere,” said the governor's legal counsel Henry Kappel. “We hope this will encourage them to come back to our port.”

ASG's chief petroleum officer Jack Kachmarik, said the largest sale of diesel fuel in the territory is to the fishing fleet but American Samoa is facing competition from other Pacific islands which are offering lower prices.

“More importantly, there are tankers at sea refueling these fleets taking business away from us,” said Kachmarik, who is also manager of the Territorial Office of Fiscal Reforms (TOFR). “Tankers at sea are also getting very aggressive.”

He said Fiji, New Zealand and other islands have no tax similar to the one in American Samoa, which means the territory needs to become more competitive. “So far we are looking at a drop in sales this year by 50%,” he added.

In 2002, American Samoa sold 28 million gallons of diesel fuel but this year, Kachmarik said sales are estimated to drop to 16 million gallons or less.
Waiving the fuel tax will result in a loss to ASG of about $700,000 a year, but Kachmarik said ASG will loose this much or even more this year anyway, because of the stiff competition the territory faces at this time. “With prices of fuel so high world wide, fishing fleets are looking for lower prices, so we have to be competitive at all times,” he said.

“With the waiver in place, we hope to attract vessels back to Pago Pago not only to fuel up but also to replenish supplies and undergo maintenance,” he said.

The excise tax waiver was timed to coincide with the return of the longline fishing fleet. About a dozen longline fishing boats are in port now.

The executive order defines commercial fishing vessels as all purse seiners and longliners engaged in commercial fishing in excess of five tons dead weight, plus reefers or “mother ships” that are used to transship fish products, plus diesel fuel tankers that provide fuel at sea to commercial fishing vessels.