Legislation that will require Cayman’s two major fuel distributors to reveal specific pricing information on gasoline and diesel shipments was approved in a key vote last week, but certain details of the bill remain to be hammered out in a Legislative Assembly committee Monday prior to its final passage.
The Dangerous Substances Handling and Storage (Amendment) Bill, 2015, requires the Cayman Islands chief petroleum inspector to collect and analyze information on fuel prices and pricing methods from importers – Sol Petroleum and Rubis – and provide that information to the government minister responsible for the petroleum inspectorate.
Upon request, the importers are required to provide fuel pricing information including: initial costs, cost of freight, insurance and brokerage fee, customs duties, estimates of fuel in stock and the amount and type of fuel to be imported in the next shipment.
Refusal to disclose that information upon request, or to provide false information, can lead to a maximum $20,000 fine upon conviction, according to the bill.
Lawmakers debating the bill Thursday did not disagree with its general intent, but there were several areas they wished to amend. Those included potentially raising the maximum fines into the six-figure range and making public the pricing data companies are to present to the minister.
Planning Minister Kurt Tibbetts, who oversees petroleum regulation matters, said government would fully review and consider all changes suggested by lawmakers, but was wary of legal challenges to some of the proposals made by legislators.
“The government has run out of patience with trying to negotiate some sense of reasonableness with the fuel distributors,” Premier Alden McLaughlin said. “We believe that … they collaborate about fixing prices. We are not going to let the current free-for-all with fuel prices remain.”
Mr. McLaughlin and Mr. Tibbetts have acknowledged that what the legislation seeks to accomplish will be difficult, and that there have allegedly been veiled threats from the oil companies over the years that they would abandon Cayman if the government sought to implement a regulated price market for fuel.
Mr. Tibbetts said government was merely asking for information at this stage, but that the dangerous substances bill and the upcoming Public Utilities Bill, which would give the petroleum inspectorate far greater regulatory power over the fuel industry, will create a stricter operating environment than in the past.
Opposition Leader McKeeva Bush, while not speaking against the general legislation, sounded a note of caution regarding two areas of the proposal: the additional layer of government it will create and the extent to which it would actually help to reduce prices.
“Whatever the good intentions with this bill, this is a bureaucracy and I wonder … how long before the public will get relief?” Mr. Bush asked.
“If, for instance, we knew we had paid too much, there is a price gouging law in existence, which we could be amending if necessary … and get relief to people quickly,” he suggested. “The minister [referring to Mr. Tibbetts] well knows what he’s dealing with. These are powerful people. These are part of the oil bloc. This little small island, we won’t have the power to fight them.”
Mr. Tibbetts said negotiating with “big oil” over the past decade or so had not worked, and that government was essentially at a loss for what else to do: “What we have in this industry, by and large, is a duopoly. While I make no accusations … it is very possible that collusion has done on … and if we do nothing, will forever go on.”
Local gas station owner, Bodden Town MLA Osbourne Bodden, said it is not only local drivers expressing concerns over high fuel prices, but gas station managers as well.
Mr. Bodden’s family has owned Lorna’s Rubis [formerly Texaco] for decades in central Bodden Town, and he claimed most gas station owners in Cayman are now only making their money on sales of convenience store items such as food and cigarettes.
“You don’t make money on fuel,” he said. “[Local retailers] are basically dictated to. You’re told you must have your markups within this [range], you must compete with the other fuel suppliers and therefore everyone ends up making nothing.”
Mr. Bodden said new fueling stations are due to come online in Prospect and in East End shortly, and that “slicing the pie into smaller pieces” would merely lead to losses for local station managers.
“I’m fed up,” he said. “We don’t make any money on our gas station anymore. All I’m doing is paying bills and getting robbed.”