At least one station drops price below $5
Holiday season fuel prices on Grand Cayman continued to fall at a steady, if not spectacular pace, with at least one retail station dipping below the $5 per gallon mark for the first time in more than a year.
The per gallon price reduction in Cayman remained slow compared to retail prices in the United States, where average prices for regular, unleaded gasoline dropped to US$2.23 per gallon on Jan. 2, down from US$2.62 on Dec. 11 – a fall of 39 cents per gallon in less than a month.
Prices per gallon of regular, unleaded self-serve gasoline on Grand Cayman went from an average of CI$5.59 in late October to CI$5.11 by Dec. 24, according to figures provided by the Cayman Islands Petroleum Inspectorate. The 48 cents per gallon drop was over two months.
Before Oct. 24, retail prices at Grand Cayman gas stations had not changed in months, according to the inspectorate’s figures.
On Jan. 2, the lowest reported price per gallon of regular unleaded fuel – $4.84 – was recorded at Jose’s Rubis station. According to figures compiled by the petroleum inspectorate, at least two other stations – Walkers Road Esso and Mike’s Seven Mile Esso – were selling $5 a gallon gas on Christmas Eve. Most other stations, Rubis or Esso-Sol, were hovering around the $5.09 to $5.14 per gallon mark.
While lauding the steady price reductions at the pump since Halloween, chief petroleum inspector Duke Munroe said he was a bit disappointed in the overall retail pricing on Grand Cayman.
“We expected prices to break the $5 threshold before the end of 2014,” Mr. Munroe said.
He said fuel inspectors would be making the rounds at local stations again Friday to “gauge what is happening” across the territory, and said he hoped to report back to the public by Monday at the latest.
“The [price] slide continues on the global scale for crude oil, hence refined petroleum product prices. However, the caveat is that the spread is not constant,” Mr. Munroe said.
“With reference to Brent (North Sea/Europe) price benchmark, the price differential between highs and lows per barrel of crude prices were on average US$6.50 per month in the second and third quarters of 2014. In the last quarter of 2014 however, it doubled; the price spread was on average $13 per month. The actual (net) reduction over this period is US$57 per barrel, just about 50% of the highest price recorded for 2014.
“Of much more relevance to us, the average refined prices for gasoline and diesel were falling at an estimated 8 cents per U.S. gallon per month in the second and third quarters of 2014. However, that quintupled in the last quarter to approximately 40 cents per U.S. gallon (per month).”
Mr. Munroe said he expected some further decline in local fuel prices, despite whether the international pricing trends continued or even if they remained at current price levels.
“I think the oil companies have acknowledged this by explaining the lag effect on their pricing strategy,” Mr. Munroe said.
In other words, Cayman stations still have some catching up to do, based on average fuel prices recorded by the American Automobile Association.
The U.S. national average for a gallon of regular, unleaded gas sold at retail stations peaked sometime in June at US$3.67. Since then, the national average retail price has steadily dipped, with a reduction of US$1.43 in about six months.
Cayman’s fuel prices, which stayed at a peak between June and October, only began to drop in late October. Since then, average prices have dropped by 48 cents a gallon.
Mr. Munroe said the Cayman Islands public should consider – in addition to the typical lag in retail price reductions because of the way fuel is supplied here – that Cayman stations sell gas in imperial gallons, 20 percent larger than the standard U.S. gallon. Also, gasoline weighs more heavily in fuel price averages, which has driven down average price figures in the U.S. a bit more than in Cayman, he said.