Pump prices up next week

CUC bills not until October

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Prices
at most petrol stations on Grand Cayman will be increasing early next week,
according to information provided by one of the country’s major fuel
distributors.

The
hike is due to a 25 cent per gallon increase on import duty for gas and diesel
fuel that was approved by a majority vote of the Legislative Assembly last
month. The move is expected to raise more than $10 million for government
coffers within the next year.

Although
the import duty increase was approved earlier, distributors said they would not
put prices up for retailers until the current supply of fuel ran out. The
current supply was imported at the lower duty rate of 50 cents per gallon for
gasoline and 60 cents per gallon for diesel.

According
to representatives with Esso, a re-supply ship was received on 2 July. The fuel
import duty increase took effect on 1 July.

The
new duty rate is 75 cents per gallon on gas and 85 cents per gallon on diesel. 

“We
are waiting for the old inventory to be used up,” said Esso Country Manager
Alan Neesome. “(That will occur) probably sometime early next week – it depends
on the daily consumption rate.”

Chevron-Texaco
representatives said they were preparing a statement about the fuel import increase,
but that had not been received by press time. Chevron-Texaco is the other major
fuel distributor in the Cayman Islands. 

It
is possible for prices at the pump to go up sooner if individual retail petrol
stations choose to increase prices early. 

In
any case, all retail stations contacted by the Caymanian Compass agreed that
once the new fuel import duties raised the prices they pay to distributors,
customers will start feeling the pinch.

“If
Texaco Caribbean passes on the 25 cents to us, we will have to pass it on to
customers,” said David Wight, who manages the Walkers Road Texaco station.

Esso
Four Winds owner MacGregor “Greg” Yates said, with the costs of doing business
increasing sharply this year in Grand Cayman, local petrol retailers are left
with little option but to raise prices.

“Work
permit (fees) have doubled, insurance has tripled; I can’t see taking a 25 cent
loss on the gallon,” Mr. Yates said.

Bodden
Town station owner Osbourne Bodden said his operation typically makes between
60 to 70 cents per gallon, sometimes less, depending on costs. If the station
was to simply eat the 25 cent duty increase, it could lead to between a 35 per
cent to 42 per cent cut in earnings on petrol sales.

Mr.
Bodden said he understood consumers are hurting as well in the current economy
and wished another way could have been found to raise government revenues.

“But
all stations are struggling in this tough economic climate and many owners are
subsidising their stations with the ever-increasing costs of doing business,”
he said.

CUC rates

Caribbean
Utilities Company, the lone electricity supplier on Grand Cayman, has already
indicated that its monthly bills would be increasing by roughly 5.5 per cent because
of the import duty hike on diesel.

However,
that 5.5 per cent increase likely won’t show up on customers’ bills until
October because the company purchases fuel two months in advance.

CUC’s
Neil Murray said the increase would be shown as a rise in the “fuel factor” on
customers’ statements. That new fuel factor will first be applied to September
bills, which will be mailed to electricity customers in October.

CUC
is by far the largest single consumer of fuel on the Islands as it uses diesel
fuel in its electricity generation process.

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Drivers are going to start paying more at the pump next week.
Photo: Stuart Wilson
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