CIG seeks public input on fuel regulator plans

| 27/06/2016 | 25 Comments

Cayman News Service

(CNS): As government plans to create a utilities regulator that will include the fuel industry, it has published a policy document for public consultation on how the new office will take shape. Government is proposing to create an Office of Competition and Regulation, which will oversee telecoms, electricity, water and, for the first time, the fuel sector. The planning and infrastructure ministry, which has responsibility for all these areas, is asking for comment on the reform plans, which people hope will help keep fuel prices down.

With Cayman still facing what the community perceives are higher than necessary gas prices at the pump, the government has said it is reluctant to impose profit controls and hopes that through greater transparency and regulation it can ensure competitive prices.

“Price controls are a last resort but the government will do whatever it takes,” said the minister with responsibility for fuel and the utilities, Kurt Tibbetts. He said that Cabinet had decided to establish the multi-sector agency to assume all responsibilities and functions of the existing Information Communications Technology Authority (ICTA), the Electricity Regulatory Authority (ERA), the water and sewage regulatory regime, as well as the fuel market.

“The scope is even a bit wider, as the OCR will also assume the economic regulatory responsibilities of the Water Authority Cayman (WAC), encompassing water production and supply, as well as wastewater collection and treatment,” he said.

Tibbetts added that the OCR would have a critical function, by facilitating economic development and innovation in these sectors as well.  “The expectation is that it could become a major driver in facilitating the development of a new pillar in our economy,” the minister stated.

The discussion paper proposes a phased approach, which included the amendments to the Dangerous Substances Handling Law and Storage Law which were enacted last October. The next piece of legislation will be the Fuels Markets Bill, which will allow the OCR to analyse data, assess retail prices and competition, and take necessary measures to promote fair competition.

The document explains that the ICTA and ERA will cease to exist once the OCR is created because it will take over the functions set out in the acts relating to those regulators and also becomes the regulator for the water industry. But it is the supervision of the pricing mechanism used by the petroleum importers, which has been cause for much concern in recent years, that will determine the success of the new office.

Consumer value and protection will be one of the primary considerations. As the local fuels markets and its pricing mechanisms are closely tied to economic activity, the OCR’s oversight of this sector will be critical, officials indicated. Under this new plan, the Petroleum Inspectorate will be fully integrated into the OCR, which would assume responsibility for the functions of the inspectorate.

The policy document is posted on the website of the Ministry of Planning, Lands, Agriculture, Housing and Infrastructure (PLAHI). Printed copies are also available at the lobby of the Government Administration Building,and at public libraries.

Members of the public are encouraged to review the discussion paper, and to submit their feedback by e-mail to ministry.plahi@gov.ky or in writing to: “Fuel Markets Discussion Paper”, PLAHI Ministry Government Administration Building. The deadline for public feedback is 15 July, 2016.

Fuel & Utility Changes Proposed – PRESS

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Comments (25)

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  1. Anonymous says:

    Kurt could just ask Ozzie why he is charging so much..

    A sitting cabinet member owns a gas station..Does anyone see this going anywhere or resolution coming forth while there is continued conflict of interest?

    Wasting funds in an election year to say you are doing something when you know damn well you won’t…typical PPM…

    Way to buy votes Kurt!

  2. Allar says:

    Another PPM do nothing plan, studies, and all the bull that comes with doing nothing. Typical under Kurt watch

  3. YTB says:

    I visited the Brac this weekend and the gas prices there are not much higher than the prices reflected at the gas stations on West Bay Road. Which leads me to question, why is it necessary for the prices on WB road to be much higher than any other gas station? Perfect example of price gouging! Are they deliberately targeting tourists because they wouldn’t know the difference in prices somewhere else? This kind of behavior drives tourists away from our islands because these are some of the determining factors when planning a future vacation – especially those travelling with families – every dollar counts! Perhaps tourists need to be told they can check the government website for an updated list of cost of fuel and location of gas stations. I’d help them download the app! Now how do you feel when you’re being targeted and individuals choose not to shop or get gas at your gas station…! Bet that would stop the price gouging.

  4. YTB says:

    How much more comments, input and reports does government need! For the sake of everyone living in these islands…. Caymanians and expats, implement the price controls! The greedy owners of Gas stations are never going to lower fuel prices on their own, even when they buy in bulk and receive substantial discounts! Let’s help them do so! Mr. Tibbetts you need to stop procrastinating and implement and enforce price controls over fuel which will positively and significantly impact our community! You’ve been waving the switch of discipline like a school teacher threatening the students that are behaving badly but because they never see you act on it… they don’t take you seriously. Now bring the switch down! Get your point across!

  5. Anonymous says:

    here we go again …. why is there need to consult or study.. the prices are way way too high any fool can see this. Government just need to get balls and act and not just 6 months before election this happens year after year . Can the people not see this? I doubt anything will change to be honest!!

  6. Anonymous says:

    Why is this only focused on fuel? I mean, I like it… but what about the price of food and other essential items?

  7. Anonymous says:

    The Fuel Inspectorate IS NOT A CONSUMER ADVOCACY GROUP.

    The Fuel Inspectorate deleted the public-commissioned Fuel Inspection Report of 2013 from their website. It showed, with images, the remarkable inconsistency of fuels being sold at a retail distribution points with elevated amounts of salt water, rust, and fresh water contamination in fuel holding tanks at operating fuel stations. Even at the time of publication, the Inspectorate had taken the extraordinary stance to redact the identification of the stations with questionable quality – sighting that it might bias consumer behavior and that would be unfair to the distributor owners!

    Perhaps Kurt Tibbetts and Duke Munro could explain why they felt it necessary to delete even the redacted version of the expensive report that the public commissioned?

    CNS: Does anyone have a copy of this report?

    • anonymous says:

      it is right on their website, please look before speaking blindly…
      http://www.gov.ky/portal/page/portal/cpihome/publications/fuel-investigation-report

      • Anonymous says:

        Thanks for digging that out – there is no longer a link to the report from the Fuel Inspectorate’s own website: http://www.cpi.gov.ky

        Since the identity of the stations has been redacted to “Sites E1-10 and R1-14”, how is the public supposed to determine where best to shop for gas for their cars, boats and equipment, given the alarming discoveries of things like:
        “2 inches of water in tank”, “water table and ground water flow issues”, Existent Gum levels of “65”, “16”, and “7”(where 4mg/100ml is the acceptable standard)…

        How is it in the public’s best interest to obscure the identity of these stations?

        “Existent Gum may be simply explained as the name implies, the gum-like materials existing or formed in gasoline. Oxidative degradation due to extended storage, or additions of non-volatile materials such as some additives, etc. are primarily responsible for existent gum, which can also be explained as ‘solids or long chain compounds’ that can precipitate in gasoline and cause issues with certain components such as injectors and induction system in engines. This parameter was found to be above the upper limit set by the standard test and while Esso provided explanation and somewhat ‘justification’ for their results, Rubis results which were significantly higher remains unexplained by the company.”

        Additive Methylcyclopentadienyl Manganese Tricarbonyl (MMT compound) is blended into gasoline to improve its Octane rating. Due to the absence of legally mandated limits in Cayman Islands there is no restriction on what can be added individually by stations. Rubis purports to utilize US EPA standards for this additive of up to 1/32 gpg (despite testing 700 times higher at 7/32gpg on Grand Cayman by Fuel Inspectorate), while ESSO utilizes treat rate consistent with allowable limits in Canada and Australia up to a maximum 18mg/L concentration, Esso truck sample was found to be comfortably below at 13.7mg/L (which is 0.9611gpg). There were no samples taken from any stations to measure consumer pump levels. Why not?

      • Anonymous says:

        Photographs and Observations from pages 27-28 have been removed from this version of the report! Go figure!

  8. Sharkey says:

    So Anti 12:35am , if price control is not the answer to the problem of high price gasoline. What is needed to fix the issue ? How do we expect government to fix the issue , when some of the
    Politicians own half of the gas stations and their friends owns the other half and making profit from the issue . That’s rip off and the rip off continues.

  9. Anonymous says:

    I have said it before and I will say it again!
    The way to control gas prices here in Cayman is to stop charging import duty based on volume and to start charging that import duty as a % of cost, insurance and freight. This way the Government will know exactly what the oil companies landed cost is and how much mark up is added after duty assessments. Change the law so that oil companies have to produce their invoices for purchase, insurance and freight, just like everyone else besides liquor has to do.

    Why is it that the only two commodities that does not get charged duty on the actual cost but is assessed on volume are fuel and liquor? could it be because of who benefits or cronyism?

    One small change in the import duty law can remove the cloud surrounding the actual cost of fuel to the suppliers. With this information public, the natural laws of capitalism will enforce some kind of natural cost control to this industry………. nothing else will………. commissions to oversee the problem will be manned by humans and humans can always be bought out!

    • The lone Haranguer says:

      Listen friend, to complicated, I know of at least three companies right now on this island who are importing gasoline in relitively small quantities using it in there own businesses and selling any excess to friends and family cheaper than Rubis and Sol is selling to us.
      XXXXX

      Take it away Kurtie………………….zzzzzzzzzzz

  10. ANTI says:

    Sounds like a lot of power to consolidate into one department. Without the people resolving the country’s corruption problem this is a red flag to worry about.

    We need new & competent leaders before we hand over this great consolidation of powers.

    Side note. Just when the ICTA had seemed to start properly functioning it is being dissolved.

  11. Anonymous says:

    Amazing how long it took prices to come down (unlike anywhere else in the world and by nowhere near as much) and how quickly they started moving up again… The UK has legislation on this, why don’t we copy that?

  12. Anonymous says:

    Discuss. Consult. Discuss. Consult. Repeat.

    Standard tactics of Kurt, the King of the Ditherers.

    • Anonymous says:

      Get rid of the Petroleum Inspector. That post should be deleted from the budget. Never served any purpose from inception. The people who are dealing with the soaring gas prices must be living in la la land, when their excuse was they didn’t know the price of imported fuel. Get of your butts and do what has to be done. We are sick and tired of incompetence in your ministry.
      If the green iguana is a yard stick for procrastination and incompetence, you have won the gold medal.

    • Anonymous says:

      Perhaps you should school yourself in the tactics of the Lodge? Once you have done this, his tactics will become crystal clear.

  13. Kathleen Bodden-Harris says:

    I’ve been howling about this for years!!! Will be watching carefully. Hope this isn’t just thrown together to placate the complainers only to make matters worse. These are serious issues that need careful scrutiny & consideration!

    Next in line is education & healthcare. Take care of your people 1st!

  14. Sharkey says:

    I think that you are one of the politicians that are trying to make people think that you’re doing something when you are not.

  15. Sharkey says:

    Mr Tibbetts I think that the first place to start is price control and a enforcement board that makes sure that price gouging is not happening, and that consumers are paying fair market price , and companies are making fair profits.

    I can’t expect you to do that because that would be a conflict of interest, just like the politicians are owners of gas stations which are in conflict of interest to what needs to be done.

    • ANTI says:

      Price control and Enforcement board has no place in a capitalist world. It is a bad idea, bad for business, bad for government. You have no idea how many extra hours of labor a business would pay just to keep documents and information in check for the regulators.

      This will once again only truly hurt the small and local business class. (The class who’s money is staying in the country and circulating to local hands)

      What the people need to do is STOP Buying and supporting businesses who are ripping you off. They will either close their doors or adjust their ways of business.

    • Anonymous says:

      The politician that I know owns a gas station now, inherited it. So he should dispose of his inheritance to please who? Therefore if a millionaire us a politician, what should he do with his riches? That has nothing to do with prices, it is the useless Petroleum Inspectorate that serves no purpose. Oil rich countries don’t have Petroleum Inspetorate..

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