Fuel prices to be pulled in check
Esso gas station, Shedden Road, Grand Cayman
(CNS): The opposition leader’s proposals for much closer scrutiny of the prices that the oil importers are charging to find out if they are exploiting the country or not was rejected by government Friday. However, Planning Minister Kurt Tibbetts said a newly proposed public utilities commission will have the power to check and order the fuel firms to reveal the markup on prices.
Tibbetts said this was one subject where everyone was on the same page to protect the consumer. But he said the opposition leader’s motion asked for things that government would not be able to do, so they would tackle the problem through the creation of the new regulator.
Bush tabled his motion earlier this year when prices were still very high in Cayman, despite the decline in the US (see related story), but the issue was not debated until last week’s meeting. The opposition leader claimed that people were being misled because, while prices have now begun to fall, they were still far higher than anywhere else.
He said people might conclude that prices were falling and so they should “jump for joy, which is exactly what the importers want us to do — sit and be happy.” The sad fact, he said, was that local prices were nowhere near as low as they should be and had only fallen this year by around 14%.
“Our prices are artificially inflated … We have been saying this for years but we need to examine it closely,” Bush suggested, as he pointed to the details of his motion.
“We have a rather strange occurrence in these islands,” he said, “Whenever global fuel prices rise … the lagging effect goes out the window and prices are increased within two weeks but when prices are falling, we never seem to escape the lagging effect,” Bush said.
Transparency in pricing should lead to a fall, the opposition leader said, and government needed to properly verify the prices and introduce legal powers to ensure that the prices were fair and truthful.
Saying that people were cursing the local gas stations because of pump prices, Bush pointed out that they were not to blame because it was the bulk importers that were controlling the prices. He said if government could bring down fuel prices, it would bring savings all across the local economy.
During the debate, Tibbetts, who is the minister responsible for fuel-related issues, demonstrated his sympathy with Bush’s motion and said he had “given up” hope of negotiating with the oil companies after years of private talks because they continued to claim the pricing was proprietary information. Talking about past battles, he explained the stonewalling that had gone on.
Tibbetts revealed that the current Petroleum Inspectorate can enquire about gas prices but it has never been able to confirm what the importers say is true. However, the proposed public utilities commission would be supported by legislation to help them get the information. He said it would not take long to create a commission but legislation would take time.
The minister said Cayman Islands was “very proud” of its free market and governments were scared of encroaching on it with price regulation but he said fuel could be the exception. “It is the one commodity that every single thing and every single soul has an effect on,” he said.
Having given the oil importers a chance to address the issue, Tibbetts said he had warned the representatives from the two major firms, Rubis and Sol, that if they did not come back with a plan that showed government how pricing structures were worked out, they would be regulated by the commission.
Tibbetts added that government was not satisfied that the laws of competition were prevailing when it came to fuel.
“I hope they’re listening; I hope they hear it,” he said. “I don’t believe a word they tell me about their markup, that it is meagre. They are full of it.”
Category: Local News
As long as MLA Osbourne makes money like water on his 30 cents a gallon more expensive then the rest gasoline, NOTHING will happen.
You want to see lower prices at the pump right away? Tell Government to cut their mandatory fee by 50% on each gallon of fuel sold. They seem to have very selective memories when it comes to certain revenue initiatives.
It was $0.75 per gallon and they recently cut it by $0.25 to $0.50 per gallon. That was the lion’s share of the pump discount felt by consumers in the last couple months.
Can someone say why we have an Petroleum Inspectorate? What purpose does it serve? The very person who worked at one of the fuel establishments, says it is a military secret that cannot be divulged about the pricing. Come on, all importers have to produce an invoice for goods, in order for duties to be calculated on. The fuel suppliers are importers, so they have invisible invoices. Why the government always make excuses for certain elites an others have to follow the law word for word? Amazing!
Price is only one dimension of our circumstances: fundamentally, we need a governmental or independent body to regularly test the quality of the fuel being dispensed from the retail stations, and those report cards should be made public. When comparing our pump prices to those of the civilized world, the fees for inspection are already baked into their prices – a consumer protection service that is wholly missing here!
To put things in perspective: the Planning Dept’s Inspectorate redacted the names of the fuel stations in their 2013 report on fuel quality and will not reveal the names for fear it might bias consumer behavior. Anyone who purchases fuel for their boats or vehicles in the Cayman Islands should download and read this report: http://www.planning.gov.ky/HTML_BODY/PI/Fuel%20Investigation%20Report%202013.pdf
What??? High fuel prices??? Hey, kids….. can you say “Collusion”?
No local business owners on the commission, or brotherhood members!
Yeh. Like that would ever happen.
Next up, Government will look into the supermarket’s and any other merchants that have upped their prices due to the previous fuel price increases right???!!!
Nope, they will continue to allow these to go unchecked, because the implementation of a minimum wage is going to make everything hunky dory.
I’m sorry to be the deliverer of bad news, but the reality is this new commission or committee or what ever will more than likely be impregnated with individuals who are neck deep with the very same people they are tasked to regulate. We will hear the usual BS about them being “experts in the field”.
Fuel does not seem to be a free market in Cayman. It looks suspiciously like a price maintenance and market sharing agreement between the companies. This could be made illegal like in the US or EU, except this would affect all the other businesses doing the same thing.
Why only petroleum pricing? What about LPG? This is derrived from oil the same as gasoline but pricing hasn’t moved, or are we OK protecting Caymanian family monopolies?
Hahaha, yeah soon come, keep the faith!
Better chances of seeing a unicorn backfire rainbow dust in the middle of George Town.
This oversight is long overdue. However, now that Government intends to establish such oversight I hope they will do it properly the first time and include parameters like fuel quality standards and fuel pump calibration as well. Some gas stations are known to calibrate their pumps in US gallons when prices drop.
One Cabinet Minister has told me that he does not read the “blogs”. Perhaps that is the practise of them all, so perhaps my suggestion will fall by the wayside.
Some gas stations calibrate their pumps in US gallons when prices drop?! I’d really like to know how you find out when they’re doing that?