What is with Cayman gas prices?

I believe there may have been a change of ownership of the oil distributors here, but it seems the old regime of customer exploitation still exists.

The price of oil on the international market has dropped from $110 per barrel at the end of February, to around $83 today. The average price of a gallon of gas in the United States has dropped by 36 cents during the last two months. The price of a gallon of premium gas at my local gas station during the last four months has dropped by ZERO cents. I pay $5.88 a gallon, and we should have had at least a 10 per cent price adjustment, which would amount to 58 cents a gallon.

Why is it that consistently gas prices here do NOT reflect a reduction in prices on the world markets, yet instantly reflect price increases, and why is it our government does nothing about it?

Roger M. Davies

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3 COMMENTS

  1. This is a great letter. There is a major failure on the part of government to address corruption in the gas/petrol industry here. As Mr Davies correctly points out, prices rise instantly in Cayman when the price of a barrel of crude rises, but the decrease in the worldwide price of crude is never passed along to Cayman.

    The government’s job is to protect the residents of Cayman. In this case, it needs to step up and monitor the fuel industry to make sure it is not profiteering on the public, especially during these difficult economic times.

    The Compass ran a nice article on this a few months ago, but we haven’t seen much since. I hope the Compass continues to put pressure on both the fuel industry and the government to reform their ways.

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  2. I think they keep the prices high to help compensate for all the robberies.

    Though at those prices, pretty soon any robbers will be seen as ‘Robin Hood’ style heroes, instead of the little cockroaches they are.

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  3. I think the answer is a combination of a couple of factors.

    Firstly the gas station owners have faced rising overheads over the past couple of years in the form of work permit and utility cost increases, which they have passed on to their customers.

    Secondly there are no laws in Cayman preventing collusion and price fixing. I understand the gas station owners meet regularly and one can only assume they discuss and agree on pricing strategies at these meetings.

    Unfortunately at the moment there does not appear to be any genuine competition between gas retailers, who are presumably quite happy to see their profit margins improve as the wholesale cost of their product falls.

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