Why are gas prices so high?

With all of the publicity that is being given to the high cost of fuel in the world press, I am concerned that those of us living in the Cayman Islands are paying one of the highest prices gasoline and other fuels.

Consider that there are no income, sales or property taxes imposed on the importers and retailers of fuels in these Islands apart from the one-time import duty of KY$0.60 per imperial gallon when gasoline is imported.

Our fuels are generally imported from Aruba, Jamaica, Trinidad or Venezuela; countries that are a stone’s throw from Cayman therefore the cost of transportation is at a minimum.

Yet the retail cost of (self service) gasoline today at one local service station is: Regular – KY$3.89 per US gallon (which is 20 per cent less than an Imperial Gallon).

Premium – KY$3.93 per US gallon.

Compare those prices with the price today, per American Automobile Association in Miami as:

Regular – US$2.926 (KY$2.438) per US gallon.

Premium – US$3.228 (KYD$2.69) per US gallon.

My questions are:
1. Why are having to pay KY$1.59 more for one US Gallon of regular gasoline here than our counterparts do in Miami?
2. Why is the importer paying import duty on imperial gallons but is selling us in US gallons?
3. Does the above hide a 20 per cent windfall profit right there for someone?
4. Is the margin of profit on the sale of gasoline reasonable?
5. Is it considered gouging when the price of old in-stock fuel is increased even though there has been no new shipment?
6. Are the importers seeing greater return on their investments in these Islands than in other areas?
7. Is it possible for the oil companies to offer us more realistic rates?

Richard E. Arch

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