Petrol prices dropped by up to 62 cents a gallon in gas stations in Cayman once gas stations started dropping their prices early last week.
Leader of Government Business Kurt Tibbetts said Thursday that consumers had already begun to see a drop in prices.
‘The public should see a significant reduction in petroleum prices at the pump,’ he said, with a reduction of 62 cents a gallon on gas and 50 cents a gallon on diesel.
Despite falling crude oil prices, the price of petrol at the pumps in Cayman had remained high in part due to the impact in the Gulf of Mexico by Hurricane Ike, which led to the closure of 14 refineries.
About half Cayman’s gas comes is sourced in the US Gulf Coast.
Mr. Tibbetts said the prices did not immediately drop in Cayman when they dropped in the United States because gasoline is priced and invoiced at the time an oil tanker is loaded, and any increase or decrease in oil prices after the tanker was loaded will not be reflected in the prices in Cayman.
‘At one point, Mexico, a major supplier of crude oil to the US, reduced its shipments of crude to the US because of a lack of refinery capacity. In other words, the hurricane created a disconnect between oil and gasoline prices,’ Mr. Tibbetts said.
He said that the arrival of a tanker from Europe last weekend had led to the drop in prices this week. It was loaded in Europe because of the uncertainty of supplies from the US Gulf Coast, and another tanker expected later this week which ‘may again affect retail pricing, hopefully in a downward direction’.
Mr. Tibbetts urged the public to choose those gas stations that had already lowered their prices.
‘If one [retailer] continues to sell at the higher price, then maybe another on your route is selling at the lower price,’ he said. He said consumers could find the prices of gas at each station on the Planning Department website, planning.gov.ky on the Petroleum Inspectorate link.
According to the Planning website, full-serve gas prices on Grand Cayman Friday ranged from $4.29 a gallon to $4.98. On Cayman Brac, gas was selling for $5.15 a gallon, and on Little Cayman at $5.45.
Over the longer term, Mr. Tibbetts said the fuel prices set by wholesalers would be more closely monitored in the future once amendments to The Dangerous Substances Handling and Storage Law (2003) were passed by Cabinet, likely at its next sitting.
The amendments would give the Chief Petroleum Inspector power over fuel prices.
‘These amendments will seek to regulate the process by which the two current wholesale distributors of gasoline and diesel products, and any other distributor, who in future may operate in Cayman, can adjust their wholesale prices.
‘Once these regulations are approved and gazetted, wholesale gasoline and diesel distributors must notify, in writing, the Chief Petroleum Inspector before increasing the price of their commodities. The inspector would then have the authority to approve the increase; refuse it, in part or in whole; postpone the increase to a later date; or set terms and conditions upon which the increase may be made,’ Mr. Tibbetts said.
He added that residents could expect to see ongoing monthly reductions in their CUC bills.
He said: ‘For example if your bill was $418 last month, you should expect it to be $390 with this reduction in October and then $359 in November.’