Gas prices up next month

Import
duty on petrol will increase to 75 cents a gallon from 1 July, pushing gas
prices up by at least 25 cents.

Premier
McKeeva Bush announced the duty increase of 25 cents on every gallon of diesel
and petrol in his budget speech on Tuesday morning.

Gary
McTaggart, chief petroleum inspector, said motorists could expect to see the
increase being passed on to the consumer through a hike in petrol prices at the
pumps.

Mr.
McTaggart said the duty is paid by the oil company importing the fuel. “They
pay the current 50 cents per imperial gallon. At 25 cents more, that’ll be 75
cents per imperial gallon,” he said. “That amount is added to the cost when it
is sold to the service stations and the retailers pass it on to the customer.”

The
current duty on diesel is 60 cents per gallon, which will rise to 85 cents,
once the proposed increases are introduced on 1 July.

Mr.
McTaggart said that, price-wise for gasoline, Cayman was “in the middle of pack
in the region, we’re not the highest and we’re not the lowest, but we’re
getting higher”.

He
said the price for gasoline had been going down in the United States in recent
weeks. “Hopefully, we’ll see some reduction the next time a tanker comes in,
but normally the price doesn’t go down on fuel, it seems to just go up.”

Gas
prices in the US are at about CI$3 per gallon while in Cayman, the price of
petrol is hovering around CI$4.50, Mr. McTaggart said.

“That’s
a $1.50 difference between the US and Cayman. You have to take into account the
cost of the fuel coming here in a tanker… There are a lot of added costs, and
now some more duty,” he said.

MacGregor
Yates, owner of Four Winds Esso in West Bay, said: “The import increase will be
passed on to the customers. How they will react will be as they always react –
they don’t want it, but they’ll have to take it.”

Mr.
Yates said the increase would come on top of a hike in prices in recent months
that had been due to dealers upping prices so they could have higher profit
margins “which were very small”.

The
increased duty is expected to generate $10.3 million for the government within
the next year.

The
higher import tafiffs on fuel only applies to Grand Cayman and Little Cayman.
Import duty on fuel to Cayman Brac will not be increased, the premier said in
his speech.

In
January, the government increased duty on many imported items in a bid to raise
extra revenue, but those tariff increases did not apply to gasoline or diesel.