The mark-up on fuel for wholesalers and retailers in the Cayman Islands is close to being the highest in the world.
That is the finding of the former Texaco Country Manager James Tibbetts who was asked by Government to perform a study on the pricing structure of fuel in the Cayman Islands. He also compared the selling price and cost of fuel with other similar jurisdictions in Caribbean.
‘I presented my findings to Government on 19th September, but in a nutshell, the results show that Cayman has the highest price and the lowest taxes on fuel of any location that was studied,’ Tibbetts explained that he looked at U.S. Canada, and many of the Islands in the Caribbean.
The petroleum study was initiated by the Leader of Government Business Kurt Tibbetts and came about following concerns about the overall cost of living in the Cayman Islands.
A recent check of price comparisons between random gasoline pumps in Boston, Massachusetts and George Town showed that the price at the pump for regular unleaded in Boston was US$2.55 per gallon and in George Town it was CI$4.32, or US$5.27, per gallon.
One important factor to bear in mind is that the size of the gallon varies with Cayman using the Imperial gallon, which is about one fifth larger than the US gallon. However, the CI dollar is also valued at approximately one fifth higher than the US dollar.
Mr. Tibbetts said he intends to make a copy of the presentation available to the Caymanian Compass.
The Ministry of Planning said on Thursday it is still reviewing the petroleum consultant’s report and was not able to comment on the issue.
‘Government has a good working relationship with the oil companies and gas station owners and we do not wish to jeopardise this before we’ve discussed our findings with them. Earlier we worked successfully with the owners to get price signage installed and that initiative was met quite positively by the public,’ a spokesman said.
Mr. Tibbetts said it costs the oil companies between 15 cents and US$10 to extract a barrel of oil and it is selling in the open market for over US $80/barrel, the profit margins are staggering.
In 2006 the Exxon Mobile Corporation posted profits of US$36 billion, the largest annual reported net income in US history, according to Howard Silverblatt, a senior analyst at Standard and Poor’s. He said the previous high was Exxon’s US$25.3 billion profit in 2004.
It is not clear just how much profit margin Cayman gas station owners are putting on each gallon of fuel here in the Cayman Islands.
Mr. Tibbetts was not prepared to say exactly, but when asked by Cayman Free Press if it was as high as 75 cents per gallon, he did not dismiss that figure, he said ‘in some cases it may be even more than that.’