Refuel has been granted planning permission to build a gas station on the Esterley Tibbetts Highway. It will be the first time a petrol station will be opened on the road which stretches from George Town to West Bay.
The property, which will include a gas station and a four-unit commercial building, is located south of The Residences at The Ritz-Carlton, with the Esterley Tibbetts Highway and West Bay Road bounding the site to the east and west, respectively. Entrance to the petrol station will be on the Esterley Tibbetts.
Refuel currently has one gas station on Grand Cayman, on Maclendon Drive in Industrial Park in George Town, which it opened in 2017. Two years ago, the Central Planning Authority refused an application by the company to open a second fuel station and convenience store on West Bay Road, stating that it had failed to demonstrate how the facility would service the needs of the community in the immediate area.
Refuel owner Dow Travers argued in a letter to the CPA that the new gas station would cater not just to the local community, but to all road users in Cayman.
He said his company is the only one bringing emission-reducing B5 and E10 fuels onto the islands, in line with Cayman’s National Energy Policy’s Fuel Sector Strategy. B5 biodiesel is a low-level biofuel blend consisting of 5% pure biodiesel and 95% petroleum diesel, while E10 petrol contains up to 10% renewable ethanol.
In his letter, Travers said at its new station Refuel would introduce a new high-octane ‘flex fuel’ called E85. Flex fuel is an alternative fuel made of a combination of gasoline and methanol or ethanol.
He stated, “Refuel is proud to have done more to reduce fuel costs in the Cayman Islands than any other station in the past 40 years, (we were the first station in recent memory to provide fuel for less than KYD$3 a gallon), but we simply cannot lower costs further without being able to spread our fixed costs over more units.
“If we are to make an even more significant impact on fuel prices in Cayman, we must be allowed to expand, and increase our scope and scale economies. We must, as a small Caymanian company, be allowed to compete with the foreign regional importers at scale or we will forever be competing uphill on an uneven playing field.”
Travers challenged a comment made to the Planning Department by Duke Munroe of fuel regulator OfReg, in which he stated that “the increase in the number of gas stations continues to place (upward) pressure on fuel prices. Subject to finalization of the comprehensive fuel market assessment, Grand Cayman may be overserved by gas stations.”
Travers said Munroe’s statement conflated the supply of emission-reducing lower-priced Refuel gas with the fuel provided by Sol and Rubis and failed to make “the basic economic distinction”.
“The supposition that competition places upward pressure on prices, flies in the face of recognized economic theory, Public Account Committee recommendations, and the National Energy Policy,” he said.
“The attraction of the emission reducing and economically competitive product is evidenced
by the existing Refuel station operating at full capacity. That is unanswerable. The ability of
Refuel to further reduce fuel prices in the Cayman Islands, is limited unless it can increase
scale,” he added.
He continued, “OfReg and its consultants appear to have confused genuine open market economic competition with anti-competitive strategic entry/preemption games. The intention of these entry/preemption games in this scenario is to enable the established incumbent duopoly, Sol and Rubis, to saturate the market deliberately to prevent new entrants, here Refuel, from competing or gaining market share. That monopolistic saturation will indeed lead to upward price pressure through the establishment of barriers to entry and protected returns.”
According to the company’s in-house data, cited in a letter to the CPA, more than 2,000 vehicles a month commute from West Bay to Refuel’s George Town gas station to purchase fuel. “These customers would greatly appreciate a station in their community,” the letter noted.
Objectors to the application pointed out that there are already three petrol stations located along West Bay Road, and that an additional one nearby would be detrimental to an area frequented by tourists. The objectors also raised concerns that the presence of a gas station in the location would impact nearby property values, and that fuel fumes and odours would impact surrounding premises.