Cooking gas not likely to be affected by price hike, WIOC boss says

The price of cooking gas is not expected to rise.
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By Carlena Knight

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Despite an imminent spike in the cost of gasoline at the pump, the cost for Liquefied Petroleum Gas (LPG) commonly known as cooking gas is not expected to increase.

That was the comment from West Indies Oil Company (WIOC) CEO, Gregory Georges, on Monday while speaking on the Observer AM show.

“I would think it is unlikely, even though the cost has gone up. The fact is that propane has only moved I think twice in almost 40 years. In 1986, the price of a 20-pound cylinder was $21, and in 2009, it was moved to $32 per cylinder, and it has not changed since,” Georges added.

He did however reveal that the price for diesel will be affected.

“The price of diesel on the world market is currently greater than even that of gasoline. We are likely to see increases in the price of both gasoline and diesel, and probably diesel a little bit more because the worldwide cost is actually higher,” Georges said.

However, although the WIOC boss is not expecting an increase in the price of cooking gas, economist Petra Williams did indicate that residents will feel the impact of the oil prices in other areas.

“Fuel is one thing that is considered a basic necessity, so in terms of our ability to significantly reduce consumption, it is unlikely. Any movement upwards in fuel prices will impact transportation costs on the ground and that could potentially be passed on across all sectors. The one thing that we didn’t touch — and I don’t know if the government will hold strain — is the price for electricity, the fuel variation charge. If that, too, is impacted, then we are looking at a movement in all the major basic items and that could then lead to multiple impacts,” Williams explained.

The cost of crude oil has been soaring as a result of the Russia/Ukraine conflict, and over the weekend Prime Minister Gaston Browne explained that the price at the pump will be increased between Monday and Tuesday.

Browne said residents could pay as much as EC $15 per gallon of gas in the coming days. The current cost is EC $12.50 per gallon.

There is still no confirmation on what that price hike will be as according to Georges, that figure is determined by the government’s finance ministry. He explained to date, “they have not been formally advised of the price [increase].”

Georges, however, explained that several external factors, including the import cost, the price build up in product, the price internationally, inland transport, wholesalers margin and dealers margin have led to the pending increase in fuel prices.

He explained that the import cost has come so high that the government is subsidising gasoline and diesel, and the retail price will have to increase to bring parity to the consumption tax level.

Georges also sought to clarify questions raised by some residents as to why Antigua and Barbuda would receive such a sudden impact despite having millions of gallons of gasoline and diesel in storage.

Political Leader of the United Progressive Party Harold Lovell made the statement on Sunday when he called for urgent action to protect residents from soaring oil prices.

But Georges explained that while they do have a significant quantity of the product in storage, it is not owned by WIOC.

“Yes, we have adequate supplies because the product is in tanks, but the product does not, the title does not belong to West Indies Oil; it belongs to our third-party customer. In the event that we do have a supply shortage, then we can always purchase products from their tanks, but that can’t be bought at a price that was old but obviously, current prices.

“If you were to drive around the Fort James beach, you would see a couple of ships at our jetty, and that ship has been discharging product into our tanks and, therefore, what you are seeing now on our market is the product from that particular shipment and that is why it is affecting us,” Georges added.

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