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Government clarifies issues regarding demands from petroleum dealers

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Contact: Chris Satney

Wednesday, March 4, 2009 – Government has been clarifying its position on request for increases in the margin from Petroleum Interests on the island.

The Government of Saint Lucia has been engaged in dialogue with the Petroleum Dealers Association and the importers of petroleum products into Saint Lucia for just over one year now.

In examining the dealers’ request, government officials say, they took into consideration dealers’ claims of increases in their cost of doing business, especially their fixed costs.

The petroleum dealers have requested an increase of thirty-cents per gallon on the retail margin for unleaded fuel and forty-cents per gallon on diesel — that up from the ten-cent increase awarded to them by government in 2008, when it increased the cost of petrol on the island.

Over the last three weeks motorists and other users of petrol have engaged in panic buying, which officials blame on wrong signals sent to the community. That, they say, is uncalled for and should be discontinued.

Throughout the period of high prices for world crude, peaking at $145 per barrel, government, officials say, maintained the retail price per gallon of fuel and absorbed all increases in the landed price for the commodity.

Government felt then, that to have allowed the price of fuel to increase in line with the world market prices would simply have been too much for the economy to bear.

Instead, they say, Government chose to subsidize the price of fuel at the pumps and other petroleum products such as kerosene and cooking gas in its effort to cushion the adverse impact on the economy.

Officials say it is against this background and mindful of the need to ensure the prudent management of the finances of the country that Government has considered the requests for increases in the margin from the petroleum dealers and petroleum importers.

Officials say they are confident of the continuation of negotiations, until a deal is reached on the way forward.

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