Cayman’s utilities regulator, the Utility Regulation and Competition Office (OfReg) has issued a statement saying it was deeply concerned about what they say are “unsubstantiated comments” made by a licensee in some local newspapers concerning its position on the National Energy Policy goals and innovation in the fuel sector. The statement made it clear that OfReg was in favour of ensuring Cayman’s consumers had a choice of fuel options and that it had no objections to a recent application by Refuel for another ethanol and biodiesel facility to be built in the Seven Mile Beach location.
It did,however, offer some words of caution when it said that it had, via its predecessor entity Petroleum Inspectorate, conducted a market analysis that showed that the overall market was already approaching saturation in 2015 based on the number of gas stations in operation.
“The issue was more pronounced in certain districts, while some districts remain underserved,” OfReg stated.
With this in mind, it said it began including a cautionary statement when approving gas stations applications.
“In the event the fuel market economic assessment indicates that to achieve efficient pricing, there may need to be options such as rationing of gas station licenses, these options are taken into consideration by potential investors,” it confirmed.
For the Seven Mile Beach Refuel gas station project, OfReg said it told the Central Planning Authority that the new/proposed site was contributing to achieving Cayman Islands National Energy policy (to achieve 70 per cent renewable energy supplies by 2037) and such initiative and investment should be encouraged/facilitated.
“Accordingly, OfReg had no objection to the project moving forward, subject to the technical conditions and considerations,” it said.
It also said that, with fuel prices a function of several factors, with cash flow and cost flow
being major determinants of prices, newer entrants such as Refuel (which had significantly lower overheads) had the unique advantage of offering considerably lower prices for consumers' benefit, which was encouraged.
“Currently, renewable motor fuels are imported and supplied under a lower capital investment model, enabling consumers to benefit from the lower prices at the pump,” OfReg said.