Fuel costs in the Cayman Islands are driven by several different factors, which according to industry experts, make it difficult to forecast the final price at the pump.
Essentially, the prices we pay in the Cayman Islands are unique to our jurisdiction and explain why gas in the Sister Islands is sold at a considerably higher rate than on Grand Cayman.
Country Manager for ESSO in the Cayman Islands Alan Neesome explained the situation in the Cayman Islands said, “No one can accurately forecast what fuel prices will do in the future. There are too many variable factors affecting prices of crude oil and finished products (e.g. Gasoline and diesel).
For one, gasoline prices are influenced by a number of factors, including changes in the price of crude oil, government regulations and taxes, supply and demand and refining and transportation costs. This is coupled by the fact that suppliers do not control the price of crude oil or the retail price of gasoline. Instead, world market forces determine crude oil prices and local market forces determine retail gasoline prices. The prices paid by consumers at the pump reflect these costs as well as the profits (and sometimes the losses) of refiners, marketers, distributors, and retail station owners.
Mr. Neesome said, “What happens in the crude oil markets affects those buying products derived from oil- such as gasoline. Where crude oil prices go, so goes the price of gasoline.”
Crude oil is a major component in the price of a gallon of gas – greater than half the price in some countries. Market prices of crude oil have been generally increasing since 1999.
Crude oil prices are affected by many factors, including growth in world demand (most recently led by growth in Asia) and uncertainties in supply attributable to bad weather, geopolitical instability, and unforeseen operating problems.
A statement from gas station representatives from Texaco and ESSO, noted that, “Cayman stations dispense fuel in Imperial gallons (20 per cent more fuel) and does not sell regular grade gas (lowest grade is premium, this adds 19 cents per gallon).” They added that when duties of 85 cents per gallon for gasoline are factored in, coupled with the fact that self service United States prices versus full service prices for Cayman can add 50-53 cents per gallon, the picture begins to become clearer.
How to cut fuel costs
With gas prices rising and expected to go even higher as summer approaches, consumers are looking for ways to conserve.
According to officials from the Petroleum Inspectorate, the time of day someone gets gas can makes a difference.
“Gasoline expands when heated and if you fill up early in the morning, when fuel in the station’s tank is cool, there may be some gain in volume as opposed to when the gasoline warms up later in the day,” said Gary McTaggart, former chief petroleum inspector. He added that carrying less weight in a vehicle, making sure tyres are properly inflated, not accelerating too hard and economising the use of air conditioning were some simple ways in which gas and money can be saved.
Tony Brown, manager at Brown’s ESSO, joked that one thing consumers could do to start saving on gas is, “Drive the speed limit”. He explained that the gas business is not necessarily the windfall consumers think it is. “We have to pay eight per cent of every cent that goes through our register to our franchise,” he said. “That is about $18,000 a month, plus rent of about $17,500. Our [electricity bill] is about $12,000 per month and we have about $40,000 in payroll each month. That, in addition to what is happening in the world market, is why we have to charge what we do in the Cayman Islands.”