The Editor Speaks: Why are our fuel prices so high?
I don’t know.
Of course if you ask the two fuel companies here, Rubis and Sol who replaced recently Chevron/Texaco and Esso respectively, they will give you all sorts of reasons why we cannot compare our prices with the ones in the USA. Even though both companies buy their fuel from the USA!
The argument that it can take over 4 weeks to see any falls in prices in Cayman because of the time it takes to get it here from the time it is purchased doesn’t hold water (or even petrol). Every single time the price in the USA goes up within days it does here. It is usually 6 weeks to see any fall and that doesn’t even equate to the percentage fall on our price compared to the US. Shouldn’t that at least be the same?
When the Minister of Planning, Kurt Tibbetts, whose portfolio is responsible for fuel, warned both companies they are one step away from price regulation if they do not start engaging in fair competition on prices, their reply was the same. If you do that it will make for even higher prices.
I have never been one for too many regulations, especially when it comes to price controls as a competitive market usually makes for the need unnecessary.
However, it seems very clear there is collusion going on and when, as the minister pointed out government has no way of knowing what the purchase price of fuel was and the companies refuse to disclose it, then action must be taken.
And both companies are forcing the government to do this.
In the Legislative Assembly Tibbetts told his colleagues, “There is no proper way to explain the unbalanced and arbitrary behaviour of the local prices as they relate to what is taking place in the global market. The public perception is that local market prices are immediately reflected when prices increase on the world market but very slow to respond when prices have the opposite effect globally.
“Our first step to regularizing this sector of our economy will be the embedding of a monitoring and oversight mechanism in the new public utilities commission, which is currently being developed. There is no clear correlation to the international market or justification for local fuel prices.
“The government’s firm position is that first of all we must determine if competition truly exists. If those measures fail, then the next step will be outright market price regulation.
“We need to understand the dynamic of fuel prices and parallels of world and local prices and the commercial strategy of local companies. We need transparency.”
I applaud him 100%.
Tibbetts added:
“We are going to remain vigilant and adapt policies to achieve this end. If this initiative is unsuccessful and bulk suppliers don’t involve themselves in competition, government must pursue other policies for the fuel market. Fuel suppliers need to be good corporate citizens and work with the government to find a balance.”
And his last missive to them:
“Let the industry take note, we are going to take all necessary steps to ensure local economy grows and one segment of the economy doesn’t stifle growth for the rest or hold everyone to ransom.”
We still may not find out why our fuel prices are so high but maybe the warning to both companies might make them think.
Nah. Probably not.
NOTE: I have just learnt Cayman businessman George Ebanks is organising a march on parliament and a petition. He said the bulk importers could no longer justify the prices they are charging, which are making the cost of living in Cayman far higher than it needs to be
On the Facebook page “Cayman Is Fed Up With High Gas Prices’ it reads:
“This morning we see quite a few more stations who have marked down their gas prices to about $4.65 to $4.69 a Gallon. Thankful for these small little deductions but it is NOT ENOUGH!!! Want to do Cayman a big favor gas companies? Drop it below $4….. in fact we will publicly support any gas station willing to step up FOR THE PEOPLE and drop their prices tomorrow to $3.99 OR LESS and set the example that we need better pricing!! ANY GAS STATION OWNER UP FOR THAT CHALLENGE???”
Cayman Is Fed Up With High Gas Prices
Sign the petition
“We; the undersigned, being legal residents and visitors alike, wish to register our complete dissatisfaction with the price of fuel/ gasoline which is being sold in the Cayman Islands at prices that CANNOT be justified and are unreasonable. These prices are a major factor in our high cost of living which effects us all on a daily basis. We now demand better gasoline prices that are based on prices reflected on the open Mercantile Commodity Market.”
