‘We’ve been ripped off’ on gas prices

| 30/06/2020 | 117 Comments

(CNS): The price of gas at the retail fuel pumps riled up several members of the Legislative Assembly on Monday, as they pressed the premier over what OfReg was doing to address the problem, given the dramatic fall in global oil prices this year. Chris Saunders (BTW) said, “We’ve been ripped off,” and everyone had figured that out. Several members said the public could see this and could not understand why the regulator is taking so long to realise it too.

Saunders was one of several opposition members who demanded that government address this persistent problem. Even as oil fell to zero dollars a barrel at one point this year, and taking into consideration the moving target of the so-called ‘lag’ between the purchase of fuel by the wholesalers and its arrival at the high street pumps, the price per gallon here has barely fallen below $4.

According to OfReg’s daily gas price tally, on Tuesday the cheapest regular gas in Cayman was still CI$3.82 per gallon, while the bio-fuel was CI$3.39.

Premier Alden McLaughlin was pressed by opposition members over the pump prices and the regulator’s apparent inaction, since it was formed to address this very matter over three years ago.

Responding to a question from Opposition Leader Arden McLean about what measures OfReg was taking to ensure the prices at the pump were fair when compared to current world prices, the premier said OfReg had launched an investigation into the slow reduction in prices at the pumps following the COVID-19 pandemic.

And while it had found that the price had fallen by 58 cents per gallon and one provider had plans to cut the price per gallon by another 15 cents during this time, he said that OfReg was not satisfied with the fall, given the precipitous decline in global prices and was making further inquiries.

McLaughlin said OfReg had given the fuel providers until 24 June to submit their explanations about why prices had not dropped more.

“The office will conduct its analysis and take appropriate action based on its findings,” he said, adding that the exercise was expected to be completed by the end of July. He confirmed that not all of the information required had been submitted by the suppliers, but as OfReg was still talking to one entity about it, no fines had been issued.

The length of time it was taking to address the issue frustrated some MLAs, who said the information was already available and everyone knew what the price of fuel was, so it was simply inexplicable why this had not been resolved.

Veteran MLA Anthony Eden (SAV) was outraged that it was taking so long to find out why Cayman was paying so much at the pumps.

“How can we take so long to find out what is happening? It just does not make sense,” he said, adding that the country needed to get rid of “this albatross”, referring to OfReg. He said that the regulator had consumed a lot of public cash without doing anything.

McLaughlin defended OfReg, which falls under his ministry, stating that it had to go through the proper process to get to the point where it would take action because if it did not, then whatever measures were imposed to help the consumer could be subject to challenge. The premier said the rule of law was the measuring stick that the country must follow.

Responding to a question from Saunders as to whether OfReg could set the price at the pumps, McLaughlin said there was no provision in the law that allowed OfReg to just fix a price. Describing it as the “nuclear option”, it was clear McLaughlin wanted to avoid price fixing.

But if that was the only solution then it would be considered, McLaughlin said. He added that he was going to take a closer look at what was going on because this was a perennial problem and government had to find a way to make things fairer for the consumer.

However, Saunders pressed government on what it intended to do when it was confirmed that “we’ve being ripped off”, because everyone had already figured that out, and how the people would get their money back.

But the premier said he did not want to “get ahead of ourselves” and the answers would “appear in the report” that OfReg was now working on.

See the LA exchange in full on CIGTV below, set to start with the opposition leader’s question about OfReg:


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Category: Business, Politics, Private Sector Oversight, Retail

Comments (117)

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  1. Anonymous says:

    Ok “Totally Impossible” – It didn’t happen at all, I dreamed it. FU!

    To the other, I chose not to identify the station but I could.

  2. Anonymous says:

    The pump price must be related to the wholesale price by a formula. The island has thousands of qualified accountants that could prepare a report illustrating the markup from wholesale to retail. All people want to see is justification for the apparent high pump price when the world crude price has dropped. At its simplest, an audit report would consist of the purchases in bulk of gasoline and diesel, and the related pump prices together with the accounting method (first in, first out or average pricing or whatever). The government could simply make it a condition of the various licenses that the wholesale information is provided to the public (the retail price is visible at the pump).

  3. Anonymous says:

    Parkland Corp (PKI on TSX) bought SOL in 2018. The guy (in charge) is: Pierre Magnon. Maybe also ask how much Parkland/SOL have contributed to the R3 Cayman Fund.

    https://www.parkland.ca/en/about-parkland/management

  4. Anonymous says:

    Hilarious watching Alden cling to due process and doing things in their proper order when it comes to this investigation that we ALL know will come to a foregone conclusion

    But when it comes to the Smith Cove project there is no paper trail and no documents from the Committee that was involved in the decision making process

    Ofreg is a waste of money, and has never in my memory served any valid purpose discounting delayed action and slaps on the wrist

    We all know we live in essentially an unregulated business environment in all but limited areas

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  5. Anonymous says:

    Ripped off by everyone including the regulatory dept.

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  6. Anonymous says:

    Imagine the Premier actually thinking we need to wait till the end of the month for a report to tell us what we already know

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    • Anonymous says:

      And no doubt this report will contain ‘commercially sensitive’ information so won’t be available to the public.

  7. Anonymous says:

    Seriously? LOL. What we got a dozen gas stations? We’ve got the buying power of a freeway truck stop and you want US gas prices? Get real.

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  8. Say it like it is says:

    The taxpayer has lost more on our useless OfReg than it has on gas prices.

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  9. Noname says:

    Little wonder some households install solar panels on their roofs , drive electric , and run their pools using DC pumps if you ask me! It just makes sense if you own and believe in the well being of this little island.

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  10. Noname says:

    And people around these parts wonder why some households go off grid , drive electric and run their pool pumps using DC pumps !

  11. Anonymous says:

    re: Quality

    The photos from the 2014 Fuel Inspectorate report are still amazing all these years later. I’m not aware of any stations on Grand Cayman having taken the commercial responsibility to exhume and replace their corroded underground fuel holding tanks from pre-Ivan.

    The identity of each specific retail location was redacted because it was deemed “too commercially sensitive” to those stations actively serving shit fuels at $5/gal. There is only so much a fuel filter can do. Caveat emptor.

    http://www.gov.ky/portal/page/portal/mpchome/publications/fuel-investigation-report

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  12. Anonymous says:

    Getting fibre optic cable to all areas of Cayman should be their priority right after sorting out the fuel prices…the problem is they never seem to get past the issue of fuel prices and can’t multi-task. What do they all do over there?

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    • Anonymous says:

      Thinking that Ofreg should build a fiberoptic network in the Eastern Districts is one of the stupidest ideas ever to come out of an organization renown for their stupidity. Does not the very word “regulate” tell them that they should be prohibited from ownership?

      What would they do with their “investment” after fiber is made redundant by 5G, 6G, or some other new technology that can provide a higher level of service at much lower cost? Do they then ask LA to pass a law saying that customers in the Easter Districts have to remain on their fiber for the next 25 years?

      All Ofreg need to do is agree with the service providers that a certain level of service (100Mbps?) will be available by a certain date (Dec 31, 2020?) or there will be fines for not making the service available.

      Ofreg should NOT be trying to advise service providers on technology issues. This would save them millions of dollars by not having to attend conferences all over the world and hire consultants to tell them what technology to tell the services providers they have to use.

      Ofreg should REGULATE, and stay the hell away from everything else that they know little to nothing about.

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      • Anonymous says:

        “All Ofreg need to do is agree with the service providers that a certain level of service (100Mbps?) will be available by a certain date (Dec 31, 2020?) or there will be fines for not making the service available.’

        That only works if the threat to impose a fine is credible, of course. Given they haven’t been fined or sanctioned for already breaking their obligations, what makes you think the utility providers would pay any attention.

    • Anonymous says:

      The die is cast and our future is going to be a wireless one. 5G cellular is already 100x faster than LTE, and rolling out. Everyone in the free world is going to be directly or indirectly paying Elon for SpaceX Starlink data in a year or two. 540 satellites out of first 800 are already circling overhead to allow commencement of the service and moderate high speed internet across North America later this year. The next Falcon 9 launch on July 8th will add another 60, with another 58 later this month. The initial megaconstellation is supposed to consist of up to 12,000 satellites offering super-high speed broadband coverage to the entire planet.

      https://spaceflightnow.com/launch-schedule/

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      • Anonymous says:

        Rumour is starlink is going to be 300mbps/20-30ms ping and US$80 a month. We’ll see I guess but wouldn’t want to be any of Cayman’s rip off fiber providers next year!

  13. My White Addias says:

    Off REG run by the Lodge for the lodge look at the leadership from the very top to bottom a fuel boss and office boss from the same area of the Caribbean as the two fuel companies the chairman and technology sector boss are owners and former employees of the two main telecommunication providers. Off reg is filled with too many conflict of “Special Intrests” Close it down and re organize structure.

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  14. Anonymous says:

    if fuel was free to the importers… just the cost of the actual product not including transport, tax, etc. just the price of the product, how much would it cost us by the time we buy from the pump?

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  15. Anonymous says:

    Time for OfReg Regulator and Board to resign:

    – unjustifiable prices from the perceived gas cartel

    – no electricity competition

    – rip off internet, mobile and tv prices

    – poor mobile and internet coverage

    – Chinese equipment in the telecoms networks that serve the financial services sector

    – no competition in the water sector despite willing entrants

    – no consumer protections

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    • Anonymous says:

      In fairness, OfReg started operations in 2017, did these issues start then? And did you expect that in 3 years it would have created another CUC, another water company and fix all the technology issues in the Telecom sector?

      Criticize the legitimate issues but please drop the bandwagon sensationalism

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  16. Anonymous says:

    I don’t think there’s any economy of scale supply fuel to Cayman hence the price.

    If local dealers want to lower prices they will have to switch to container fuel like Refuel does, but then you’re at the mercy of shipping companies and customs/import process which has zero resilience when there are hiccups.

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  17. Anonymous says:

    This has been going on for many decades. I was of the impression that the cartel threatened the government the last time that they attempted to deal with the unfair pricing. I don’t think that we should expect to see a meaningful outcome from the current investigation.

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    • Anonymous says:

      Certain people in high places don’t have to do anything except deposit their “gains” in their local or overseas accounts. Does the Cayman Islands have enough people to form an honest bunch of representatives? Apparently not!

  18. Anonymous says:

    give me the base cost data and a calculator and i will have your answer in 15mins.
    plus i will do it for free.

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  19. Anonymous says:

    With all the fertilizer coming from our neighbor to the northwest, maybe we can convert fool to energy?

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  20. Anonymous says:

    Mr. Saunders, thank you but you should say “we’ve been and continue to be, ripped off by gas prices.!

    But please, please all you leaders who now take up the mantle on this matter, it’s not just the prices. Please also assess the calibration issues at pumps around the island. Some fuel retailers are calibrating their pumps in US gallons and I know this from personal experience a couple years ago.

    I topped-up at a station and something prompted me to do the calculation of amount of fuel I receive vs the cost it came to vs the cost per gallon. I knew something was wrong and luckily the owner himself was on site. When I explained it to him he agreed, gave me back CI$7 (significant percentage of my total purchase) and apologized saying “the staff must have re-calibrated the pump”. Yeah right! I appreciated his actions but I believe he had little choice as we was “cold busted”. BTW, I made OfReg officials aware of this but …..

    So, please look into all retail fuel sales issues not just pump prices. Thanks!

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  21. Anonymous says:

    please cut the 75c a gallon duty !

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  22. Terry tibbs says:

    Fuel is bought in bulk. The prices were agreed long ago, just cus global price dropped, it doesn’t mean it drops at the pump, they have an agreed price for months ahead.
    As demand has dwindled, they are prob still going through the fuel paid at agreed rate get over it or get a bike. Or leave

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    • Anonymous says:

      BS

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    • Craig says:

      Not true. The island does not use fuel hedges. The spot price has been the only mentioned item. The prices should have been less than $2.00.

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      • Anonymous says:

        Who said anything about a hedge? If you buy enough gas to last 3 months at the spot price, and the regulator allows you to make a mark up on your purchase price rather than take the stockholding risk, then surprise surprise the price doesn’t go down when the market price changes. Which is exactly what the original poster said. Whether the consumer should insulate the gas stations against the price movements in gas is a completely different question. Certainly doesnt happen in other jurisdictions.

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      • Anonymous says:

        Cars and boats require refined gasoline or diesel, so the pump price is net of additional value chain precursor inputs, beyond just the spot price of WTI. Still, even generously allowing for refining, transport, onloading, freightering, offloading, and trucking, duties, those margins seem to be wider and more exploitive than prudent. You could probably sail a freighter through the spread being enjoyed by Simpson Oil Ltd Barbados (SOL) on their Cayman Islands bunkering operation. The media should really be asking their GM, Alan Neesome, or CEO Gerard Cox, for their best attempt at rationalizing their predatory pricing. Get a quote from them, and then fact check it to reality.

        https://solpetroleum.com/about-us/our-network/cayman-islands/

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    • Anonymous says:

      Just another day in the whacky private sector.

      Can you guys do anything right?

      My cable has been out for 5 days and no response. Meanwhile I submitted my helpers work permit and paid online.

      The civil service is now far ahead of the private sector. How did that happen?

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  23. Anonymous says:

    The only thing Cayman has going for it now is the low crime rate, and even that has been increasing greatly over the years. This is what Caymanians need to be protesting about, our islands becoming too expensive for us!

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    • Anonymous says:

      I’ve been screaming about this for years! Come over to the Sister Islands & see just how bad it is!

      10
  24. A regular “Joe” says:

    Fuel scheme, if prices go down, CUC won’t have a good excuse to keep overcharging and drop prices to reality, now that the biggest consumers are still not fully operating, so …. at the moment is “not convenient” for them
    CaymanKind …??

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  25. Anonymous says:

    Gas is cheap here, like electricity, compared to most of the world (USA excluded). Do all these people complaining never leave island or what?

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  26. Anonymous says:

    A smart marketer would seize this moment of increasing prices and price gouging and drop theirs to entice new clients over to their business and we should go.
    I still have some cash to spend, but I’m going to be ever so cautious with it these days. And if you rip me off, I’ll remember for a lifetime and I won’t be back.
    Tread carefully Cayman. We’re ALL WATCHING AND TALKING about it.

    22
    • Anonymous says:

      haha – like we’re really scared because you wrote in capital letters.

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    • Anonymous says:

      vote up if you switch gas stations when the price changes.
      vote down if you just go wherever is convenient regardless of price

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    • Anonymous says:

      In a free market, sure. In fact competitive pressure would force such a move – otherwise you would constantly get undercut by your competitors, who would take all the business. But your @smart marketeers@ have an even smarter solution. They just agree between themselves what to maintain the price at, so there is no competition. And because OfReg is completely useless they let them get away with it.

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      • Anonymous says:

        It is not illegal to conspire to set high gas prices in Cayman. Without the equivalent of a Clayton Act in Cayman, it only makes sense to agree on the price and carve up the market.

  27. Anonymous says:

    Everything from haircuts to restaurant menu prices has increased since Covid. Am I the only person wondering if they can afford to live here. I am a status holder, semi-retired and with the cost of decent healthcare, housing, food, gas, car service/licensing/repairs etc etc, well, I just don’t know how things will ever get better here for the regular consumer if they are not protected against price gouging. Back to a no frills life is the only sensible thing to do in a time of uncertainty.

    48
    • Anonymous says:

      Yeah, Cayman is not a good place to retire. I hope the “semi” part of your retirement brings in at least 36K a year because otherwise, you might want to head to Panama.

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  28. Anonymous says:

    I still cant get an answer as to why we cant buy regular 87 octane gas here. what they sell is mid grade 89 octane that cost more. If it is that they dont have the tankage then it would be better to sell 87 octane and 93 octane. 90% of cars in cayman dont need the higher octane gasoline. I guess they just want to make more money and the government dont give a s&%t

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  29. Anonymous says:

    We get ripped off every day here. Not surprised honestly.

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  30. Elvis says:

    Every time i go to the store i get ripped off. Whats new,

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  31. Anonymous says:

    Another commercially sensitive issue cloaked in secrecy. XXXX
    With the lowest price of regular gas being $3.39/IGal together with the fleecing of public funds for OfReg salaries the actual price is around $10/IGal

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  32. SSM345 says:

    What did the MLA Wight have to say since he owns Walkers Rd Rubis or did he recuse himself from that part of the days proceedings……?

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  33. Anonymous says:

    Poor lil Joey..

    What did everyone expect, politics in the sunshine? Too much Saharan dust for that…

    Signed,

    Smith Barcadere

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  34. Say it like it is says:

    What about the price of electricity?, CUC has benefited from the drop in prices of fuel, but not passed that on to consumers. More like Sharky than Sparky.

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    • Anonymous says:

      Break the monolithic monopoly that is CUC!
      Separate distribution from generation.
      Bring in competition on both ends
      And…..for solar….
      NET METERING NOW! Everything else is pure bull…..

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    • Anonymous says:

      Fuel costs are passed through to consumers without markup. Has been that way for 50 years. Look at the fuel factor portion of your bill and you will see that it has fallen significantly.

  35. Anonymous says:

    They’re just now realizing this? They use Internet Explorer?

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  36. Anonymous says:

    Was there ever a leader of the Cayman Islands that cared less about the people of the Islands than the current Premier? I think we can agree on that. The answer is “NO”! It makes me think he has one of his kinfolks running OfReg. But maybe not. Maybe it’s just another lodge brother.

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    • Anonymous says:

      That’s why you will never see the Chairman called to PAC and asked to give an account for his actions since leading OfReg from its inception. Too many people would be shaking in their boots to question a level 33 in the brotherhood.

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  37. Anonymous says:

    We simply don’t have anybody within the elected government that is looking out for the consumer. This is a big business government that is directed and controlled by big business elites and their lobby groups.

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  38. Anonymous says:

    ha ha ha…caymaniqns..you voting them into the house…laugh on us…lol😛😷😞

  39. Anonymous says:

    There are several things happening here that has resulted in the usual non-action approach by “OFF-REG”. First, this is an authority created by Kurt Tibbetts, enough said. Secondly, Alden don’t give a west side of an east facing rat about the hurt of the common man. And finally, this useless entity was created by Kurt Tibbetts!!!! Nuff said. Don’t wonder any longer.

    The only possible glimmer may be as a result of an upcoming election. Maybe they might pretend enough to actually care. But wait and see. There will be more promises made, and not kept.

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  40. Anonymous says:

    “the Premier said the rule of law was the measuring stick that the country must follow.” Unless his government is found to be breaching the law, then its outrageous and the courts interfering with the legislature!

  41. Anonymous says:

    Fixed prices, seriously? Danny, this isn’t Russia. Is this Russia? This isn’t Russia.

    Fixed prices cause shortages. Stupid idea. Next.

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  42. Anonymous says:

    Name and shame the owners of the fuel stations.

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    • Anonymous says:

      Fuel station owners simply operate the facilities they lease from the fuel companies. They have no real say in the matter.

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  43. Anonymous says:

    Once again, the ripoff is not limited to price, but also quality. There aren’t really any fuel standards or policing of quality beyond the aviation perimeter. Retail station owners can source their gas from any supplier/refiner middle-operator (including embargoed nations whose tankers idle near Cayman). They can cut the gas/diesel with a wide assortment of additives, into holding tanks filled with corrosion, and water contamination. The depot actually caught on fire and there was no regulator response. OfReg doesn’t care if your Mercedes engine is pinging and gunking up from bad gas.

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    • Anonymous says:

      This is nonsense. Retail station owners can only source their fuel from the wholesale importers who bring in high quality fuel from the United States. The quality of gas here is top tier (unless you are buying agricultural fuel from a certain independent gas station). There are no additives and the poor fuel tanks are being fixed, hence the fire.

      The problem with price is that the fuel is too high quality and lower octanes and purity aren’t brought to the island.

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