Fuel suppliers dominate consultation

| 26/08/2020 | 47 Comments

(CNS): Only two private individuals contributed to OfReg’s consultation exercise on consumer protection rules for the fuel sector, according to details released by the regulators. Despite broad concern about fuel prices and standards here, the public discussion was dominated by the suppliers, SOL and Rubis, both of which suggested that new regulations would push up costs, which would be passed on to customers.

The actual details of why Cayman pays so much for fuel and never seems to enjoy any global decreases in oil prices remains elusive, but the regulator has begun efforts to monitor the provision of fuel by these suppliers more closely by introducing regulations to protect consumers.

This consultation was separate from the work OfReg has done examining the structure of fuel pricing and the recent concerns that pump prices are too high and consumers are being overcharged. OfReg officials stated during a recent Finance Committee hearing that the fuel suppliers and retailers had been given the opportunity to explain why the prices are too high and the regulator was in the process of dealing with those responses.

Consumer protection from malpractice or just poor service from all the utilities was the fundamental reason why OfReg was created, but as noted by the auditor general in a report published in June, more than three years since the office was established this is still a work in progress.

However, the consultation is now complete and the proposed regulations and the comments made by the fuel suppliers, CUC and the two members of the public have been published.

The main outcome of the consultation was a narrowed definition of the ordinary consumer in order to differentiate the man on the street from powerful buyers, such as CUC and other B2B (business to business) partners who do not need the same protection.

Despite the objections from the fuel suppliers, the regulations include requirements regarding clearer pump pricing and details of how customers can complain, especially through their websites, .

OfReg is now seeking final input on the drafted regulations which are designed to outline the “protocols and rules which Sectoral Participants should adhere to when interacting with and serving consumers in the Cayman Islands in relation to the fuel sector”.

The draft document, “Determination Consumer Protection Regulations (Fuels Sector)”, can be viewed on the OfRef website.

People have until 22 September to submit their views or questions to OfReg via email at consultations@ofreg.ky, as well as by mail or courier.


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Category: Business, Politics, Private Sector Oversight, utilities

Comments (47)

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  1. Anonymous says:

    Ask yourself why are the retailers never exposed for their huge mark ups in the price of fuel at the pump. Profit margins are enormous compared to other jurisdictions and in addition to the fuel price markup they have considerable earning in selling food and mini supermarket sales. Expose the massive percentage mark up on the price of fuel added to the cost of fuel from the suppliers SOL and Rubis and you will clearly see where the problem lies. OffReg and the CIG is not prepared to investigate and expose where the real rip off of the public occurs all because the retail owners are local voters the suppliers are foreign. it is time for OffReg and the CIG to be transparent and do their job in the best interests of the public.

    • Anonymous says:

      Two dislikes to 8.55’s comment. SOL and Rubis, I assume.

      • Anonymous says:

        Sol & Rubis would like this comment, some local businessmen/politicians would not…

    • Anonymous says:

      I think if the public knew the markup they would be shocked at how low it is. How huge do you think the markup is? What would you guess retailers are currently paying suppliers for a gallon of gas & diesel?

  2. Jackie says:

    Protest these ridiculous prices. Walk, run, bike etc to work stop buying gas and let them feel it..

  3. Fair play says:

    I am astonished that both Sol and Rubis claimed the new regulations would push up costs for customers.This creates the impression that they have been acting as a cartel all these years, surely that can’t be true.

    • Anonymous says:

      Astonished because new regulations would push up costs? You shouldn’t be…… They are greedy just all the wheeler-dealers associated with the Cayman Islands government. SAD, isn’t it!!!

      • fair play says:

        9.50am Come on, do you not recognise sarcasm/tongue in cheek?. However I agree profits will go up regardless of Ofreg’s efforts.

  4. Anonymous says:

    CI$0.75 to CI$0.85 per gallon of what you pay for fuel in the Cayman Islands is a government tax, in the form of import duty. CI$0.75 per gallon for gasoline and CI$0.85 per gallon for diesel. I am certain that this is more than the majority of fuels stations gross per gallon, with the exception of one particular fuel station which pays a percentage import duty based on their declared value of the fuels that they import, due to them having a “bio” component. Notwithstanding the obvious greenwashing taking place in that particular circumstance, they are paying substantially less duty to government per gallon than Rubis or SOL and are thus able to offer a much lower price at the pump. Why not “level the playing field”? Change the customs law to have Rubis and SOL pay a percentage import duty based on the value of the fuel that they import also, and not only will customs know the value of the fuel that they are importing, but the price at the pumps will drop accordingly. Or, we can keep paying OfReg to harass the scapegoats, I mean retailers, with layers upon layers of bureaucracy and reporting requirements, which actually adds to the cost of doing business and thus to the price of fuel at the pumps. Only in Cayman would we ignore the glaring irony of having a regulatory agency wherein the officers drive around in large gas guzzling SUVs and full size pickup trucks everyday, while simultaneously complaining about the high price of fuel.

    • Anonymous says:

      You are right about about the gross per gallon, SOL said in the PAC hearings that government makes 5x what SOL do! and the fastest way to lower fuel prices is to lower duty! but that certain company you mention pays the same amount for duty on gasoline as the others btw, it was also talked about at the PAC.

      • Anonymous says:

        Actually we pay less tax than they do in the US. They have Federal, Sate, County and city etc.

    • Anonymous says:

      I agree duty should be based on the landed cost (Instead of per gallon) so that the gov would know what was going on. Much of the rest of this is wrong or misleading. The duty on “motor gas” is $0.75 per gallon. Gas with ethanol in it is the same. Cayman’s duty is low compared to gas taxes in most of the US yet they are cheaper. Retailers in the US and other companies make very little selling gasoline. They make their money on cold drinks, snacks, candy, etc. iIs this not true in Cayman? It appears that the “bio” gas is cheaper because it comes on a container ship and does not pass through the hands of Sol or Rubis and their tanks. It sure looks like the big importers are getting together and controlling their wholesale prices because their prices shoot up fast but are very sticky and slow coming down. If they are, why shouldn’t they? it’s legal and profitable. Cartels are perfectly ok in Cayman. You could import some of the UK’s competition laws to stop this, but you won’t.

  5. Anonymous says:

    Instead of closing it down how about doing something NO DEPARTMENT does.. Hold someone accountable. It trickles down hill, hold the head of OfReg accountable they hold their subordinates accountable, their subordinates actually do their job and investigate and then hold the gas stations accountable. Maybe then prices of fuel decrease instead of us paying the same and the extra money going into the business owners pockets. Everyone is quick to blame and point fingers but no one actually does anything about it.

  6. Anonymous says:

    If you have anything to complain about with OfReg it should be submitted in braille, as it’s quite clear that they can’t see anything.

    As proof of the above, I offer the following evidence from their own website.
    https://www.ofreg.ky/upimages/commonfiles/159844962920200821FS2020-1-DeterminationConsumerProtectionRegulations.pdf

    69. Rubis stated with reference to Draft Sub-regulation 10(3)(b): “we suspect we don’t have many drivers refuelling at our stations who can only read Braille. Although we strongly value the access of information to visually impaired customers, we would suggest for practicality reasons that any information can be made available upon request via an audio recording instead.

    Office Response

    70. The suggestion regarding audio recording is accepted and will be included as a substitute for Braille.

  7. Anonymous says:

    First necessary action – TELL THE CHAIRMAN “YOU’RE FIRED!

    Then and only then will OfReg have an opportunity to execute its intended purpose.

    • Annette Scrudriva says:

      Why screw around? Just get rid of OfReg and the anuses who birthed it!

    • Anonymous says:

      You have to cut deeper than the Chairman, 3:39 pm. You may not believe this, but there are people in our government that are only interested in getting rich. I would like to see a VERY HIGH percentage be voted out at election time!!!

    • fair play says:

      9.50am Come on, do you not recognise sarcasm/tongue in cheek?. However I agree profits will go up regardless of Ofreg’s efforts.

    • Say it like it is says:

      3.39pm Fire him and he will apply for the M.D’s job again.

  8. Naya Boy says:

    When you have the foreign run Caymanian govt own institution OffReg playing footsie with the foreign owned fuel suppliers what can you honestly expect.Certain expoliticians and their political cohorts need to stop filling up their cars and suvs with stolen fuel!AAAH boy this govt is corrupt NO Joke!

  9. Anonymous says:

    Most normal and sane people in Cayman just put up with exorbitant prices because they have been subconsciously programmed to accept that this is the “price of paradise”.
    Well, I can tell you that it is an illusion.
    I just bought 10 acres for 25k with a house and no property taxes. The land is laden with olive trees, fig trees, oranges, lemons, tomatoes, onions etc. (no chemicals).
    The children here are just as smart as the Caymanian elite and in fact, most of them are fluent in more than one language.
    So, if you are sick and tired of struggling and being ripped off, come to Europe.
    They are very civilized and welcoming to foreigners who respect them.

    • Anonymous says:

      2:55 pm…..You really should tell us tell us which country in Europe.

    • Anonymous says:

      …”They are very civilized.”

      While I have no issue that Cayman and CIG has many faults, I find your implied suggestion that we are not “civilized” repulsive and racist.

      Move to Europe, remotely possibly. Be welcomed by more “civilized” folks, also remotely possibly.

    • Anonymous says:

      Sounds good but what about the vat, income and estate taxes? Also, it’s not in Bulgaria or Poland is it?

  10. Anonymous says:

    What a shit show. A “complaints” link on a website is not going to be enough. We need to know how gas at the pump is priced. If the providers can’t give us a pricing model based on import costs then we can assume it is “charge as much as possible regardless of costs”. So the government needs to design its own model and impose it on the providers. Incentivise the providers to use price smoothing techniques like futures contracts. That or deregulate the industry completely and introduce proper competition.

  11. Anonymous says:

    Wait. Are the gas stations and distributors local (ordinary) companies ? Don’t they have an obligation to submit accounts, and aren’t those accounts open to inspection at the Registry (for a fee) ? Or is it something else ?

    • Anonymous says:

      OrdinRy companies in cayman have no statutory obligation to file accounts. And as for being open to inspection – you realize that with our offshore mindset the only thing you can determine ( at a fee only payable locally at that) is the address of the registered office and whether it’s up to date with its annual fees.

    • Anonymous says:

      Why would they submit accounts? Cayman has no tax on income or profits.

    • Anonymous says:

      Nope.

  12. Anonymous says:

    Every single person who is posted here didnt provide comments when it counted – stop moaning

    • Jotnar says:

      Most people probably didn’t submit a comment for the same reasons I didn’t:

      1). I didn’t even know that an exercise was underway, but even if I had I would probably not have commented because

      2) I wouldn’t think it was necessary to point out to Ofreg what is not only blindingly obvious but has been covered repeatedly in the press and social media – there is an obvious failure for pump prices to reflect movements in the base price of oil ( on the downside anyway) – the deferred pass through because you have leafy bought fuel at a higher price only works for so long. You wouldn’t expect people to flock to make comments on whether the sky is blue or something so obvious that only Ofreg cannot see it ( ironic they are concerned about braille for blind drivers when they Are the blindest people on the island). Perhaps they should have said that if you don’t complain we will assume the public is happy!

      3). I would have zero confidence in my submissions being treated as anonymous, leaving me open to stack by some very powerful vested interests ( incidentally the whole reason regulators exist – to take on powerful interests without the fear of retribution.).
      If you had a public solicitation for comments on whth

  13. Anonymous says:

    The “Who’s asking” culture of Cayman Islands regulation ensures that few dare to ask questions or waste their breathe speaking up, after being dismissed or struck down previously. It’s a symptom of the corrupt power-driven mechanisms our governance has put in place to carry out/insulate their agendas . Now they will dismiss the perhaps very valid concerns of these two, simply because there were only two, and not based on the merit of their concerns.

  14. Inquisitor says:

    Who does the audit of the fuels that come in to the islands against what is actually sold? And historically, have these figures balanced for each fuel supplier? And if not have any investigations been done to determine the where the discrepancies went?

    • Anonymous says:

      Why would anyone do this? Is fuel being smuggled in, you think? Given the high prices maybe you’re onto something.

  15. Anonymous says:

    Another exercise in futility.

    Close OfReg down!

    • Anonymous says:

      Don’t close it yet. Honestly, the idea behind ofreg is good and since all our providers are monopolies or oligopolies we need real regulation of these providers. What we need is new blood at ofreg and it’s board and some better oversight of its own expenses. Don’t give up yet…just push it hard to do what it’s supposed to do.

      • Fool me once... says:

        What, and pay these overpriced Pen Pushers for another 3 years just to twiddle their pens? Pure and utter madness!

      • Anonymous says:

        Close it down!

        Revert to the individual regulatory authorities which existed before this Monster. And yes do away with the present Chairman and his likes which have proven track records as failures.

        Enough is too much!

      • Anonymous says:

        How much are we spending on OfReg? I’m sure if we take the ($100,000 plus) salaries of all the vice-directors-in-charge-of-…. and use them for a direct fuel subsidy, we would all enjoy at least a few cents off per gallon. Seems a better use of the money.
        And surprise; the link to their “budget” on OfReg’s website is broken, so we can’t even find out how much cash we’re spending on nothing.

        • Anonymous says:

          Instead of closing it down how about doing something NO DEPARTMENT does.. Hold someone accountable. It trickles down hill, hold the head of OfReg accountable they hold their subordinates accountable, their subordinates actually do their job and investigate and then hold the gas stations accountable. Maybe then prices of fuel decrease instead of us paying the same and the extra money going into the business owners pockets. Everyone is quick to blame and point fingers but no one actually does anything about it.

          • Anonymous says:

            Close it first, then hold them accountable. The gas stations are not the problem, they just take the heat.

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