Hong Kong firm begins OfReg work on fuel prices

| 09/10/2019 | 58 Comments

(CNS): The utilities regulator, OfReg, has revealed that a Hong Kong-based firm has begun work on the long-awaited assessment of the fuel market in the Cayman Islands. OfReg said consultants from Economics Partners Limited, which won a recent tender, were here meeting with stakeholders to carry out the “market diagnostics” stage of this review of the economic and competitive status of the local market, which is expected to take around six months.

In a press release Tuesday, OfReg said the assessment would deliver a definition of the fuels market in the Cayman Islands and identify the products that fall within the relevant markets in the sector and the way those markets behave. It will also analyse the impact of the supply chain, logistics and infrastructure on the proper functioning of the market to understand the extent and the effectiveness of competition.

According to OfReg, the consultants will make recommendations to address issues identified at the assessment phase of the project, designed to enhance competition. Recommendations will be made following a consultation process with stakeholders, including fuels providers, business users, the public and government, the regulator stated in the release.

Duke Munroe, the executive director of fuels at OfReg, said he was pleased to announce that the necessary foundation work was underway.

“We fully understand the public’s concern about the price of fuel at the pumps, and this assessment will allow us to establish the framework to balance the dynamics of the various factors that influence the fuel market and ultimately, prices at the pump,” he said. “It will further allow us to identify the appropriate regulatory remedies and intervention measures needed to fix market failures where they exist.”

The long-awaited assessment of the state of competition in this market was identified as a pre-condition for OfReg to fulfill its mandate of effectively regulating the fuel sector. Effective regulations designed to enhance performance ensures competition, transparency, efficiency and innovation in the fuels market, according to the regulator, which was created primarily to deal with the concerns about the bulk fuel suppliers and their retail connections.

Before OfReg was formed the fuel sector was regulated only on the basis of safety and compliance by the Petroleum Inspectorate, but the competitive aspect has never been regulated. OfReg said this assessment is the first step towards it.

The consultants that will do the work were selected following an invitation to tender, which was issued locally and internationally. OfReg said that Economics Partners have considerable experience in performing market studies of this kind, including in jurisdictions similar to the Cayman Islands.


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Category: Business, utilities

Comments (58)

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  1. Anonymous says:

    One wonders if this new study will pave the way for the Chinese to seek their fuel products to Cayman from their Caribbean refinery holdings.

  2. Anonymous says:

    In my US city regular is $2.13/gal. today. That works out to just about the same number in CI$ and imperial gallons that you use. The federal and state tax here is $0.384/gal. The highest in the US is $0.68/gal. in New York. Maybe you are keeping the duty high to discourage driving and avoid congestion 🤑

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  3. George Ebanks says:

    Trust that they find out AT LONG LAST why we the people are constantly being RIPPED OFF with our fuel prices. 250% mark up is price gouging! !!.. (and must be stopped!

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    • Anonymous says:

      who do you want to tell to mark down the price, us Caymanians that own the stations and set our own prices, or the companies bringing in the fuel that have less markup? or the government with the duty?

      • Anonymous says:

        the largest increase in price is absolutely the government duty, if removed it would cause the most notable drop in prices. Government needs to cut their duty!

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        • HDB3 says:

          Has Govt considered removing the Fuel Tax altogether?

          What would be the increase in multiplier effect for those dollars directly being injected back into the local economy (who would actually save the money they don’t have to spend on the current Fuel Tax if it was removed?) as opposed to collecting that money from the paying public and spending it in the very inefficient manner that Governments worldwide are known to spend the public funds?

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    • Anonymous says:

      how come you never complain about the prices of Groceries?

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  4. Anonymous says:

    Actually HK is currently troublesome for the Chinese. This is the first step to us taking it over. I mean, why pay people to screw it up when we could do it so well for nothing?

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  5. Anonymous says:

    Alden…..

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  6. Anonymous says:

    how many lodge members in ofreg?…i will keep asking until i get an answer.

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  7. Thinker says:

    Spending who knows how many 10s of thousands on a consultant to determine why fuel at the pump is so expensive… forgets that CIG increases the price of fuel by $0.75 per gallon and is the main contributor to pump price being high 🤦🏻‍♂

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    • Anonymous says:

      Doesn’t explain all or even the majority of the huge gap between US forecourt prices and here. Nor does it explain why any increase in cost per barrel is reflected almsort immediately on the retail price yet price drops takes ages to reflect. Or the lack of price competition. Strangely enough oligopolistic collaboration does.

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  8. Eyeihavenoideer says:

    Should we be doing all of these deals with the Chinese with the war with China an USA ?

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  9. Relax says:

    Relax folks, the Hon. Dr. Linford Pierson is in charge here and he is ably assisted by Mr Christen Suckoo who has brought his World Class Civil service experience. They have this all under control. Nothing to worry about; just keep paying.

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  10. Anonymous says:

    As long as duty is charged on gallons instead of dollars you will not know what costs actually are. Fuel is the only commodity charged this way and I assure you there is a reason why.

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  11. Anonymous says:

    I know you have to follow the tender process but how do you end up with a Hong Kong firm from the other side of the world? There are literally hundreds of consultants from Trinidad to Texas who already know the answers to all the these questions. How is it possible to be so incompetent in everything you do?

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  12. Anonymous says:

    You just simply can’t make this crap up!

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  13. Local says:

    Funny!

    All we need to know is what is the acceptable profit margin on fuel for the region and calculate from there. The price here is high simply because we have an economy which can sustain it.

    When Refuel promised us cheaper gas at their station they calculated a cost of approximately $3.65 PG, i guest the fuel cartels got to them and they have not been below $4.00 ever.

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    • Anonymous says:

      I cant wait to see the travel bill to Hong Kong that we will be paying for. Cayman has the best firms on island, but yet we have to go all the way across the world for advice???

      Ofreg will bury us soon if we don’t reign them In or cut them loose.

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    • Anonymous says:

      Do you think Refuel should make any money at all or just sell to you at their cost?

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    • Anonymous says:

      ? Refuel is some 50c a gallon below most competitors. 4.03/gallon compared to the average 4.52. https://www.ofreg.ky/fuel/current-retail-fuel-prices. It’s not $3/gallon but its much lower proportionally than it was when they first opened.

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      • Anonymous says:

        If people on Cayman really cared about gas prices Refuel would alway be jammed with cars. After adjusting for the energy difference between gas and ethanol, Refuel’s price is more than 20 cents per gallon cheaper than any other station.

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        • Anonymous says:

          Actually it is.

          • Local says:

            My comparison with Refuel was simply to say that if they calculated a profit @ $3.65 PG then you know how much the rip of is when Esso and Rubis are selling for $4.65 KYD.

        • Anonymous says:

          I care, and I try to only get gas at Refuel… but the location is awful during peak hours (when I’m usually in that vicinity) and sometimes need to gas up at Rubis instead- I wish they’d get the other location on SMB area open ASAP!!

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    • Anonymous says:

      Funny? The Chinese have the answer? Forget the Americans. Cayman should become a colony of China as our officials are just so impressed with them.

      This is friggin ridiculous.

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    • Anonymous says:

      No. The reason fuel is so high has very little to do with the economy…….. the reason it is so high high is greed, pure and simple.

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  14. Anonymous says:

    This is how broken our government and our system is. We have a Chief Officer in Government who is in charge of our education system, youth, sports, agriculture and lands. Under that Chief Officer’s remit are hundreds of employees, and multiple departments. Yet, we pay a ” Department manager” (because they are not the CEO) in OfReg more than we pay the Chief Officer in Education, just so that department manager can do a study on the color of fuel hoses at the pump.

    And so I ask the question, what is taking 2021 so long to get here, how much longer can we continue under a Government that is hell bent on wasting the public’s money on this ill conceived entity?

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    • Anonymous says:

      You don’t have to wait that long: Use referendum

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    • Anonymous says:

      But what/who is the alternative. I don’t see any?

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      • Anonymous says:

        We should ensure an impartial and independent answer to that question the next time there is a work permit renewal. Everyone is friends over there and they are not going to break up the good ol boys club with new people who they cannot wuk wit.

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  15. Anonymous says:

    how much “research” do we need to understand we are getting ripped off at the pumps?! It’s nearly $5 ci a gallon now!

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  16. Anonymous says:

    Another study to catch dust on the shelves. It is only a pin and table napkin needed to figure out what fuels and lubricants are used and what the sale price should be! Oh yes about time for government to open another department because friends need money when they drive them fords to buy their breakfast, snacks, lunch, pickup the children and check on their own company jobs.

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  17. Anonymous says:

    This can’t really be happening, if you need a consultant to tell you that there is a fuel monopoly in Cayman and that the public is being over charged so the rich get richer we as a country have some serious issues.

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  18. Anonymous says:

    what a joke…give me the base cost info along with a calculator and i’ll have your answer within the hour.

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  19. Anonymous says:

    So what does OFREG actually do? What a mess!

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  20. Anonymous says:

    CNS can you do a FOI so we can see the total compensation packages for the members of OfReg. I think the public will be shocked.

    CNS: Anyone can make an FOI request and you can do so anonymously via email.

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  21. Anonymous says:

    So OffReg is really a brokering agency to arrange the real work to be done by outside contractors? So then, are OffReg officers paid by commission?

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    • Say it like it is says:

      8.48am You are right, they have all these people holding grandiose titles just so they can earn grandiose salaries, yet farm out all the work they are paid to do (but don’t have a clue how to), to consultants. This is CaymanFarce at it’s best.

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      • Anonymous says:

        Whenever you think that they cannot be any worse they surprise us. Are they deaf or do they not care? This maladministration boggles my mind.

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  22. Anonymous says:

    So OfReg takes out a work permit for Munroe to head up the fuel regulatory arm of OfReg, Munroe In turns hires a company from Hong Kong to do the actual work. This would be funny if it wasn’t actually so serious, if all OfReg does is hire consultants to do the little work they actually perform, can’t we just train a few Caymanians how to do procurement and pay them the 12k per month salary instead of paying this out to a work permit holder to issue sound bites and hire consultants? Who is in charge of the asylum over there anyway?

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