Economic Partners Limited, a Hong Kong-based consulting firm, has begun meetings with stakeholders to carry out an economic and competition assessment of the fuels market in Cayman.
OfReg selected the consultancy last month after a competitive bid process by the Central Procurement Office to perform the analysis of the fuels market across the Cayman Islands, which represents the first major step towards effective regulation of the economic aspects of the fuel sector.
The Fuel Market Definition and Economic and Regulatory Assessment, which should be completed within six months, is expected to define the fuels market and identify the products in the sector and how the market behaves.
To understand the extent and the effectiveness of competition in the market, the analysis will include the impact of the supply chain, logistics and infrastructure on the proper functioning of the market.
Following a consultation process with stakeholders, including fuels providers, business users, the public and government, the final assessment should also recommend how to address any identified issues and enhance competition in the sector.
OfReg requires the analysis to fulfil its mandate as regulator of the fuel sector.
Duke Munroe, executive director of fuels at OfReg, said, “We fully understand the public’s concern about the price of fuel at the pumps, and this assessment will allow us to establish the framework to balance the dynamics of the various factors that influence the fuel market and ultimately, prices at the pump.
It will further allow us to identify the appropriate regulatory remedies and intervention measures needed to fix market failures where they exist.”
The fuels sector became fully regulated when OfReg started operations in 2017. Prior to this, safety and compliance regulations existed, but the former Petroleum Inspectorate had only limited regulatory oversight of competition in the market.