Gas prices in the Cayman Islands have increased roughly 25 cents over the last week.
This comes after prices went up by about 10 cents less than a month earlier.
The Petroleum Inspectorate’s website, which lists the prices of gasoline in the Cayman Islands, showed that as of 6 April, gasoline prices ranged from $5.13 per imperial gallon for self-serve regular to as high as $5.62 to full serve premium.
Country Manager for ESSO Standard Oil, Mr. Alan Neesome explained why there were two price increases so quickly.
“The reason for the increases was that two shipments of gas arrived very closely together,” he said. “One on the Friday and one on the Sunday”.
He said he believed the last shipment came in on 3 April.
“Because the cost of goods has increased, this has to be passed on to suppliers, who in turn pass it on to customers.”
He also addressed this issue of why some stations might have higher costs than others.
“One of the problems with prices rising quickly in a market where there is competition… is that the some people may have to raise prices upon receiving a shipment, whereas their competitors may not have received a shipment,” he said. “In Cayman a lot of the uniformity in prices has to do with the fact that the dealers’ storage is limited and they get fuel everyday or every other day. That is why most dealers are immediately affected by price increases.”
Mr. Neesome pointed out that even if the Islands had its own oil refinery, Cayman would still have to import crude oil and would still be at the mercy of world markets.
Gas prices are impacted by several factors including the price of crude oil, government regulations, taxes, supply and demand, transportation costs, market speculators and competitive conditions. As a result, it is difficult to point to any one thing that is affecting the market at any given time.
Oil companies do not set prices at the pump in the Cayman Islands, but can make recommendations on the amount of increases, as the companies themselves are governed by United States anti-trust laws that do not allow price fixing.
Jose Webster of Jose’s Escape Texaco Service Station pointed out gasoline prices are much higher in Europe.
“Prices the United Kingdom were in the region of £7. So in some regards, we may actually be luckier that we know in Cayman.”
He added that he tried to hold out on increasing prices for a couple of days but eventually had to succumb to passing on the increases.
Chief Petroleum Inspector Gary McTaggart told the Compass that prices in the United States could reach up to US$6 per gallon by July. He added that in such a scenario, the price per gallon for gas in the Cayman Islands could go as high as CI$8.
In a recent online poll conducted by the Caymanian Compass, more than half the respondents said they would drive less, buy a smaller car or use alternative transportation if gas prices went over $7.