Grand Cayman gas prices, which dropped to a two-year low in March, rocketed back up last week, increasing by 40 cents a gallon for regular, unleaded fuel at some retail stations.
The price increase, the first substantial rise since October, comes on the heels of a significant retail price increase in the U.S. since January and a steady rise in Brent crude oil prices over the same period.
The increase also comes amid recent warnings in the Cayman Islands Legislative Assembly that indicated locally operating petroleum companies could soon face tighter regulations and price reporting requirements via a proposed Public Utilities Commission.
Prices at George Town and Seven Mile Beach area Esso-Sol Petroleum gas stations reported a 15 cents per gallon increase on regular, unleaded fuel since last Tuesday, from $4.22 to $4.37 for regular, self-serve unleaded fuel. In West Bay, prices for full-service unleaded went from $4.25 per gallon to $4.45 per gallon, and in North Side, prices went from $4.25 to $4.40.
Prices at several Rubis-owned stations in the George Town/Prospect/Savannah area went from below $4 a gallon to $4.39 per gallon for regular, full-service unleaded gasoline. The prices went up late last week.
The average price of regular, unleaded fuel at Grand Cayman gas stations had fallen steadily since late 2014, from a high of $5.59 per gallon in mid-October to an average of $4.38 on Grand Cayman in January, to $4.15 per gallon in late March.
Average prices on Grand Cayman again hovered in the $4.35 to $4.41 range last week, more or less matching January’s retail prices.
The price increase was not entirely unexpected. In early February, U.S. retail prices started to rise after falling spectacularly between June 2014 and January 2015. Since then, retail prices for regular, unleaded fuel have gone from US$2.18 per gallon to Monday’s U.S. national average of US$2.54 per gallon. Some market analysts, including the American Automobile Association, were expecting retail fuel prices to dip slightly again by the summer.
Brent crude oil, the global benchmark for fuel prices, increased from US$55.79 a barrel as of March 31 to US$64.75 as of Friday. Oil futures project the price pushing above US$65 per barrel.
While international petroleum prices continued their upswing, local lawmakers argued earlier this month that the local “markup” was too high and that local fuel distributors had for years “hidden” their actual markup figures from the government.
Planning Minister Kurt Tibbetts, whose ministry has responsibility for the Cayman Islands Petroleum Inspectorate, said during the Legislative Assembly’s debate on a gas prices motion that he had “given up hope” of trying to negotiate with local fuel distributors Rubis and Sol Petroleum.
“I don’t believe a word they tell me about their markup,” he said.
There are two “markups” with regard to retail gas and diesel sold at local stations. The first occurs between the time the petroleum product leaves the supplier’s shores and arrives in Cayman for storage at the Jackson Point fuel terminal; the second occurs when the fuel is loaded into the pumps at the gas stations.
Historically, it has been difficult for government to obtain that information from local retailers and impossible to get it from the fuel distributors, so Mr. Tibbetts said the government is left with “the continuing saga of the Petroleum Inspectorate inquiring about prices of fuel and not being able to have any method to verify the information that they receive.”
“The Petroleum Inspectorate will have proper legislation in place which guarantees their ability to get this information,” he said.