The following statement is issued on behalf of the Ministry of Planning, Lands, Agriculture, Housing and Infrastructure.

Statement by the Minister responsible for Planning, Lands, Agriculture, Housing and Infrastructure, Hon. Kurt Tibbetts, on The Fuels Market Regulations Bill

I have always been, and will always be passionate about the operations of the fuels market because of the fundamental impact that fuel prices have on our economy and the wellbeing of our citizens. As such I wish to offer a few comments on the recent passage of the Fuel Markets Regulation Bill, which represents a major milestone in the Government’s strategy to manage the fuel market in the Cayman Islands.

First I wish to reiterate that price control in relation to fuel prices in the Cayman Islands is not the primary objective of the Government or of this law. We are not introducing this regime as a means towards price control. In fact, as a matter of policy, the Government is committed to promoting fair competition and therefore the introduction of price controls would be an absolute last resort, and only where it is clear that the competition has failed.

In order to continuously assess the state of the markets and therefore competition, the regulator and the Government require information/data from the market to conduct the necessary analysis on an ongoing basis. The power to gather this data is provided in both the Dangerous Substances Law and the Fuel Market Regulations Law. This legislation provides the framework for the regulator to properly monitor the markets and take action to secure fair competition and bring some order to the operations of the market.

Rather than price controls, the regulatory approach will be one where we will monitor and oversee the sector based on established key metrics and parameters, and, if these are on target, we do nothing. If those parameters are found to be deviating from the target, the regulator will introduce compensatory measures to bring prices back on track.

In cases where the market is considered to have failed, the regulations provide a remedy in such circumstances also.  In order to do this in a transparent and predictable manner, OfReg’s first duties will be to set market rules which all suppliers will be required to abide by.

These rules will set the conditions for price monitoring the market as well as guidelines for introducing price changes.  This is where our regulatory mechanism is set up and empowered to facilitate innovative ways to allow the market to function efficiently and competitively to continually achieve fairer prices.

As Minister, I am conscious that up until now our laissez-faire approach, where we have relied on the suppliers to act in the best interest of consumers, has not enjoyed the confidence of consumers.

Leaving the market to itself is not an option at this time. Hence what we now seek to accomplish is to ensure is that the regulator has the means to access the  right information; utilise the right tools, techniques, expertise, benchmarks and models, etc.; perform the right analysis; assess available options; meaningfully consult with our stakeholders and industry players, then take appropriate and proportionate action for the benefit of these Islands.

Finally, in years gone by we have had great fears of the potential consequences of any actions we take in regards to the fuel sector in particular. As an essential commodity and service, we value the critical role they play in our economy. However I say confidently that we cannot afford to be captured or appear to be captured by the industry in this sector, or any sector for that matter. And, in this context, I reemphasise that the Government’s policy and OfReg’s mandate is to promote fair competition, to protect consumers and ensure the stability and security of fuel supplies to these islands.