Simply comparing the price of fuel in St. Vincent and the Grenadines and a neighbouring country — St. Lucia, for example — does not take into account some of the factors that determine fuel prices locally, Prime Minister Ralph Gonsalves says.
Vincentian will on Monday (Feb. 16) begin paying less for fuel, including the first reduction in liquefied petroleum gas since 2011.
Gonsalves has announced that the price per gallon of gasoline will move to EC$11.47, down from EC$12.72, a reduction of EC$1.25.
Diesel will now retail for EC$11.05 per gallon, a saving of EC$1.87 on the previous price — EC$12.92.
“Low sulphur diesel” will sell for EC$11.80 per gallon, down from EC$12.92, a saving of EC$1.12.
A 20-pound cylinder of LPG, known commonly as “cooking gas” will now sell for EC$29, down from EC$41.81 — a reduction of EC$12.81. A 100-pound cylinder of LPG will sell for EC$138, down from EC$197.05.
But some observers have said that the price of fuel should be even lower.
They point to St. Lucia, for example, where fuel prices were also reduced recently.
Castries in early February reduced the price of unleaded gasoline from EC$13.65 to EC$10.65 a gallon, a saving of EC$3.
In St. Lucia, diesel has fallen by EC$2.14, moving to EC$11.07 a gallon, down from EC$13.21. The price of a 20lb cylinder of LPG has moved to EC$24.20, down from EC$32.89 to — a reduction of EC$8.69. A 100lb cylinder has declined to EC$192.33 — EC$43.44 less than the previous price: EC$235.77.
This means that compared to St. Lucians, Vincentians are paying 82 cents more per gallon of gasoline, two cents less per gallon of diesel, EC$4.80 more per 20lb cylinder of LPG, and EC$54.33 less per 100lb cylinder.
Gonsalves, speaking to I-Witness News on Thursday, said that different people make different comparisons of time periods between which fuel prices are adjusted, and would select a certain CARICOM countries and compare the prices in SVG to that other CARICOM nation.
“But what they haven’t done is take the time series data. If you take the whole of 2014, the price for gasoline at the pump has been cheaper in St. Vincent than any other country in CARICOM, save and except Trinidad — well Guyana and ourselves were the same price, on an average in 2014,” Gonsalves told I-Witness News.
Before the most recent adjustments in both St. Lucia and SVG, St. Lucian were paying 93 cents more than Vincentians per gallon of gasoline, 29 cents more per gallon of diesel, EC$8.92 less per 20lb cylinder of LPG and EC$38.72 more per 100lb of LPG.
Gonsalves noted that different countries use different methodologies to determine the retail price of fuel.
“There are some countries which will not change the price until they feel they have to do it; there are some countries which do it every shipment,” he told I-Witness News.
“And we have fashioned a system which has commended itself to the currency union, but not all members of the currency union use it,” said Gonsalves, who is also Minister of Finance and Energy.
He said that a lot of people misunderstand the rolling three-month average that his government uses to determine fuel prices.
He said the price for fuel in February would take into account the three preceding months.
He said that in the period up to Feb. 5, Dominica, Grenada, Montserrat and St. Kitts and Nevis had lower prices than SVG
“But in the whole of 2014, we had lower prices than them, on average,” Gonsalves told I-Witness News.
The reason for the three-month average is that it takes out peaks and troughs, Gonsalves said.
“It’s better for stability in prices and for the consumer. You benefit, you know; but you benefit with the average, so you don’t have the wild fluctuation as you have had in some countries.
“And, indeed, as has happened before, if a spike in the price of oil is so high for some particular occurrence, … I take that out from the averages, because that would distort the average. So, there is a rational way in which we are proceeding,” Gonsalves told I-Witness News.