Minister: Gas prices should drop further

Average below $4.90 per gallon

The average price for regular, unleaded gasoline on Grand Cayman fell below $5 per gallon Monday as petrol stations reacted to one local retailer dropping its price to $4.84 per gallon Friday.  

According to information released Monday by the Cayman Islands Petroleum Inspectorate, the average price per gallon of regular, self-serve unleaded was $4.89 for Grand Cayman stations. The prices were different at Rubis-supplied stations (average $4.80 per gallon) and Esso-Sol stations (average $4.99 per gallon).  

Stations that sell only full service or premium gas are not included in the self-service unleaded averages.  

For regular, unleaded full-service, the prices per gallon include: Lorna’s Rubis in Bodden Town ($5.12), Jack’s Esso in North Side ($5.05), Four Winds Esso in West Bay ($5.05), Hell Road Esso in West Bay ($5.04) and Mostyn’s Esso in Bodden Town ($5.05).  

The price for premium self-service was $5.37 at East End Rubis.  

Gas prices at Little Cayman’s sole fuel station ($6.49 per gallon) and at Cayman Brac’s two stations (both $5.75 per gallon) have not changed over the last several months.  

The average $4.89 per gallon price represents a 70 cent decline from the price Grand Cayman drivers were paying in mid-October, when the average was $5.59 per gallon for regular, unleaded self-serve gasoline. Prior to October, local gas prices had remained steady since June 2014.  

The price drop in Cayman paled in comparison to reductions in the retail sale price in the U.S. and worldwide benchmark prices per gallon for Brent Crude oil. 

According to figures compiled by the American Automobile Association, average retail prices for unleaded gasoline in the 50 states were US$3.67 per gallon in mid-June 2014. By Monday, the average price had fallen to US$2.19 per gallon.  

The petroleum inspectorate’s own research showed the average actual net reduction in prices per barrel for Brent Crude oil between April and December 2014 was US$57 per barrel – about a 50 percent reduction globally during the period.  

On Monday, the Associated Press reported that U.S. crude oil tumbled below $50 per barrel for the first time in five years. 

Planning Minister Kurt Tibbetts, who oversees the petroleum inspectorate as part of his ministry, said Monday that the international fuel prices indicate that Cayman’s gas stations still have plenty of room to cut prices.  

“As we speak, there is a small task force doing some investigation, and we intend to be meeting with both oil companies [Sol and Rubis] very early in the new year with a view to having some positive discussions about [pricing],” Mr. Tibbetts said. “The government is firmly of the view that the companies could be making a fair mark-up and the price still would be noticeably lower. 

“Depending on the outcome of those discussions, it is the government’s view that, if necessary, appropriate legislation will be put in place,” he said.  

Mr. Tibbetts declined to elaborate. However, his former ministry under the People’s Progressive Movement government of 2005-2009 had raised the issue of price control legislation for retail gas prices.  

Last summer, Mr. Tibbetts spoke to the Cayman Compass about an agreement between government and Texas-based Navasota Energy stating that Navasota could be brought in as a consultant to negotiate with the oil companies regarding the potential for a new fuel supply terminal in the eastern districts of Grand Cayman.  

“The Cayman Islands location has geographical advantages for the supply of fuel to various other Caribbean jurisdictions,” Mr. Tibbetts said in June. “If [Navasota is] successful … then we will sit and talk to these interested parties to see whether it is something that is feasible or not.” 

The proposal seeks to consider an onshore bulk storage facility that could initially fill fuel tankers heading to the central and eastern Caribbean Sea. If it goes forward, a storage location would need to be considered close to shore, but in a far more remote area than the current bulk storage facility in George Town’s Jackson Point.  

Mr. Tibbetts said in the long term, the eastern districts project could replace the current bulk storage facility. 

“If something like this becomes feasible, it is very likely that Caribbean Utilities Company and other local entities could get their fuel much cheaper than they’re getting it now,” he said. “It could also be a means by which more competition is brought to bear in the retail fuel sector, but all of these things are what we are going to be examining.” 

Mr. Tibbetts said Monday that discussions were continuing with Navasota officials on the potential project.