(CMR) The Utility Regulation and Competition Office (OfReg) has warned that recent global events may have an economic impact on fuel prices in the Cayman Islands. However, OfReg said local operators would not be allowed to shift prices based on speculation.
The energy regulatory body said sanctions put in place by the United States, ceasing trade with Russia, may cause the potential for price inflation, as the US is Cayman's main fuel supplier.
Mr. Peter Gough, Interim CEO at OfReg, said the regulatory body was monitoring the situation closely.
“With the United States halting trade with Russia following the recent military action against Ukraine, it is imperative we prepare ourselves for the prospect that fuel prices may increase. The US is initiating moves to open up reserves to try and balance any shortfall in supply, which should alleviate some pressure in demand globally. We will continue to keep an eye on their movements,” he said.
“The Cayman market may be faced with similar cost increases as seen in other parts of the world and OfReg is working to mitigate the fallout from global events as much as possible,” Mr. Gough added.
“Global prices and global events that affect prices are intertwined – irrespective of your geographical location. The important thing is that we have an adequate supply to meet the foreseeable demand, which will reduce the upward pressure on price,” OfReg's Chief Fuel Inspector, Mr. Duke Munroe, said.
“Our prediction for price increases are contingent only on the potential inflated costs by our international suppliers, which continue to be independently verified by OfReg. The Cayman Islands is a ‘price taker’, meaning costs are influenced by the global market. While we can exert little to no moderation on prices offered at the overseas refineries, local operators will not be allowed to shift prices based on speculation,” he continued.
As a British Overseas Territory, the Cayman Islands will automatically implement all United Kingdom sanctions against Russia.