OfReg takes first step in fuel price monitoring

| 25/06/2018 | 20 Comments

(CNS): As the price of fuel inches towards $5 per gallon at the pump, the Utility Regulation and Competition Office (OfReg) has revealed plans to begin examining whether or not Cayman’s gas prices are fair and competitive. More than a year after legislation was passed in the Legislative Assembly to regulate the industry and protect consumers, OfReg is taking the first step to look at allegations that the bulk fuel suppliers are colluding over pump prices and if their profit margins are reasonable. However, the regulator still appears to be a long way from answering those questions, as it is only at the stage of seeking bidders for a market analysis and assessment.

Almost three years after local activists collected more than 14,000 signatures asking government to address what many people feel are the unfair prices people in Cayman are forced to pay at the pump, OfReg is taking only the first steps to find out just how unfair the prices might be.

In a press release Friday, officials from OfReg said they are seeking assistance for the development of a regulatory framework for the fuels market and has issued a request for expression of interest (EOI) to see what capacity and competence there is in Cayman to participate in this first stage of the process, which will be the market analysis and assessment.

“The assessment, which will build upon preliminary work already completed by OfReg, will help to identify and evaluate models on how the sector should be regulated as well as intervention strategies for ensuring that there is efficiency and effective competition in the market,” officials said in the press release.

JP Morgan, the CEO of OfReg, said the goal is to find out if market forces are working properly when it comes to gas prices.

“When there is true competition in the market, prices are set by the market because consumer purchasing habits will automatically drive prices down,” he said. “In this case the regulator’s job is primarily around ensuring product and/or service quality. In the case of Cayman’s motor fuels market, it is unclear if the market is working efficiently and this process is going to help us determine that.”

Duke Munroe, who is head of fuels at OfReg, pointed out that prices were rising again and the regulator needed to determine if the local increases were in line with the worldwide increase.

“Globally, fuel prices have been trending upwards from the ‘trough’ we have been experiencing since mid-2014, and consumers are already seeing higher prices at the pump and other areas. OfReg monitors fuel prices globally, regionally and locally, and while the movements are generally consistent across the board, we have more work to do to validate and streamline local fuel prices,” he added.

Officials said that the groundwork to examine reliability of supply, product quality, safety and compliance as well as the prices should be completed by the end of fourth quarter of 2018. But it is not clear when locals will learn whether or not they are paying a fair price at the gas pump.

During a Public Accounts Committee hearing last month Morgan said funding issues had delayed the office’s work on dealing with fuel prices and, as work had only begun a few weeks previously, he said it would be several months before the regulator would have any answers.

The EOI can be found at OfReg.ky. People or entities interested in the bid should contact Of Reg by end of day 6 July.

Tags: , , ,

Category: Business, Fuel, Politics, Private Sector Oversight

Comments (20)

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  1. John says:

    Needing to hire a helper for the helper again!

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  2. Anonymous says:

    OffReg was established to find consultants to regulate the market…classic.

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  3. Anonymous says:

    yawn…give me the base cost info and i could solve this ‘riddle’ in 30 mins…

  4. Anonymous says:

    Don’t play the game. It’s rigged. Exit the market. Go solar!

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  5. Anonymous says:

    LOL, $5 a gallon! My heart bleeds for you all. Friends in the UK tell they’re paying the equivalent of around $6.50 a gallon and their daily commute is at least twice the length of the longest road journey on Grand Cayman. The days of cheap gas are over – get used to it!

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  6. Cess Pita says:

    I would like to know how these “experts” will determine what a fair price is. What they should be looking at is collaboration between the two wholesale suppliers and more importantly examining in detail the delay in passing on wholesale price changies in the international market. What the consumer has been complaining about for years is how price increases in the market are reflected very promptly at the pump, whereas price decreases take for ever to filter through.

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    • Anonymous says:

      Agreed, they would need to look at the whole supply chain, who prices what and when, who controls the pricing. The final end piece of the retailer selling the fuel will look squeaky clean, how they get to the wholesale price is going to be as clear as bunker fuel.

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    • Anonymous says:

      Definition of an expert (ex-spurt); a “drip” under pressure. These numpties couldn’t investigate even if they were spoon fed clues. All they’re good at is bragging about what they’re gonna do, but it never gets done.

  7. Anonymous says:

    I thought this was the intended purpose of OfReg, when Kurt got up on the floor and talked about it’s formation!!!! This has turned out to be another useless entity.

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  8. Anonymous says:

    The LODGE hotel california open for business…anyone wanna join????????

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    • Anonymous says:

      OMG: that Lodge hater again.

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    • Anonymous says:

      Sorry you got black-balled. Get over it! Only those of good character are allowed to be Travellers.

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      • Anonymous says:

        Just for those who do not know what this Lodge member is trying to say.
        Someone who is “blackballed” is excluded by vote from joining the Lodge.
        Many times the Lodge is called out on CNS and this individual will expose his black balls.
        It is best not to join the Lodge because you have to swear oaths that are very, very serious.
        It is not for the everyday man. Stick to Jesus. He does not require you to lie and cheat to get ahead in life.

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