Soaring gas prices a concern

    $8 per gallon possible here by July

    TOPlead

    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.

    TOPstory

    Gas prices are already over $5 per gallon and they’ll be going up more when the next fuel shipment arrives.
    Photo: Alan Markoff
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    8 COMMENTS

    1. I dont pretend to have any detailed knowledge of the oil industry but I belive that this part of the world gets a large percentage of its oil from Saudi Arabia which so far seems to be still a stable autocracy. If oil prices are predicated on future production/ supply factors can someone explain why a past event such as the Gulf oil spill should affect future oil prices?

      Maybe governmemnt should cosy up to Mr. Chavez in Venezuela and get him to send us some cheaper oil products so that local prices could be reduced for a change.

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    2. No need to rant about the oil industry. Eventually the world will run out of oil. Everyone should turn to use alternative energy sources. We have so much sun in Cayman, there should be more government initiatives and campaigns raising awareness for using sun/wind energy both in households and businesses.

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    3. Finally someone gets it! Caycompass LOL.

      For the love of god. Everyone, stop complaining. Its like complaining your going to get old. No sense complaining. Its going to happen, sooner or later.

      Gas isnt like trees. Its going to run out. And SHOCKINGLY its going to get costlier as it does.

      Seriously, anyone not seeing this, should really reevaluate why they are on this planet. And adjust accordingly.

      Move on, get over it. Complain isnt going to do anything.

      So what…gas is more expensive than it was yesterday.

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    4. I am amazed at our dependence on oil. I saw people protesting in Asia against increases in cost of fuel and I commented, Asians are praised worldwide as the smartest people, why not put your efforts to better use, and develop an alternative energy source. My wife stayed at home to care for our child and I wondered, The sun is abundant in the Caribbean, why arent solar power air conditioners readily available. The US is poised to defend the rights of the Libyan people, why dont they expend their efforts to find sources of alternate energy. Are we afraid to figure out what powers the sun? The average person believes in some form of God, and as we look at the universe he created that requires no re-fuelling, cant we find ways to power our cities without oil?

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    5. Dont speak the price of gas too loud! It is much cheaper than most of Europe, especially the UK (where tax is around 60% of the total cost). The UK might suggest to the Premier that there is scope for a tax increase….

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    6. Kybeetee:
      Have you ever seen a solar-powered aircon unit? Id be very interested to learn the area of solar panels necessary to run an aircon (even the newest exchangers) sufficient for a modest house, let alone a shop, a mall or a cinema/theatre.

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    7. The real reason that the Oil price is going up along with all other commodity prices is Ben and the Feds money printing QE2. Commodity prices started to take off after Ben indicated that he would start QE2 in his august Jackson Hole speach.

      Fortuantly Money Printing 2 is scheduled to end in June, so some of the priicing presure may begin to abate in July. However Fed Governor Lockhart siad yesterday that If the rising price of oil plays through to the broad economy in a way that portends a recession, I would take a position we would respond with more accommodation, Talk about pouring more fuel on the fire.

      It is time for the Monetary authority to consider revaluing the cayman dollar peg against the US to preserve the purchasing power of the Cayman Dollar.

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