$8 per gallon possible here by July
Gas prices in the Cayman Islands could reach all-time highs this summer as unrest in the Middle East, coupled with the effects of last year’s oil spill in the Gulf of Mexico, send prices soaring.
“It’s a real situation that the price of gas in the United States could hit US$6 by July,” Chief Petroleum Inspector Gary McTaggart said. “A lot of this is being caused by the unrest in Libya and Egypt, as that area is where the Suez Canal is located and just about every tanker that services this part of the world has to come through there. The drilling has basically ceased in the Gulf of Mexico, but for one rig, and this has no doubt affected prices in America, which will in turn trickle down to us.”
Mr. McTaggart said through familiarisation with the average ratio between the cost of gas in America and what we pay for it here, if the price of gas reached $6 in the US, the price for a gallon of gas in the Cayman Islands would be over CI$8.
United States pump prices jumped another 4 cents Thursday to a new national average of $3.43 per gallon, according to AAA, Wright Express and Oil Price Information Service. Most gas stations on Grand Cayman are charging just over $5 per gallon right now, but that price will go up soon.
The next shipment of gas is due to arrive in the Cayman Islands in about three to four weeks. At that time, Mr. McTaggart said the price of fuel in Cayman would rise by about 10 cents per gallon, taking the highest price for regular in Grand Cayman to about CI$5.13. Premium gas could cost consumers about CI$5.23.
The Petroleum Inspectorate’s web site listed the price for one gallon of premium gas right now in Little Cayman at CI$5.99 and on Cayman Brac, CI$5.44.
Gasoline has climbed more than 29 cents per gallon in the US since the uprising in Libya began in the middle of February, costing Americans an extra $108 million per day to buy the same amount of fuel.
“If things calm down in the Middle East, we may see prices coming down again, but the best thing people can do is to offset the higher cost of gas is tune-up their cars, make sure their tires are inflated to the right specifications and don’t accelerate too hard,” said Mr. McTaggart, who explained that people could also conserve gas by using the air-conditioner in a vehicle less, as “it does tend to burn more gas.”
Oil traders say they’ve mostly priced in the loss of Libyan production. The so-called “fear premium” could rise further if similar pro-reform movements escalate in neighbouring countries such as Algeria, Iran and Saudi Arabia.
But on Thursday prices dropped from two-year highs set earlier in the week.
Benchmark West Texas Intermediate for April delivery gave up 50 cents at $101.73 per barrel in morning trading on the Nymex.