Submitted by Old Onion Bags
With the recent unprecedented rate at which oil prices have been falling on the international market, one would believe by now, that the price of gasoline to the Bajan consumer would have gone down. But no-no; don’t forget Bajans were recently placed on a diet of “Blackbird soup” and Wood dove rations by their Minister of Finance, and such levity would derail frugality. As such, the prices being asked for gasoline in Barbados remain around the same as when Brent Crude was listed on the exchange at around $120 per barrel in 2011. Who in their right minds would not believe, that with a decrease of more than 30% in crude oil prices, some semblance of a significant reduction would be passed on to the Bajan consumers?
On the international markets, crude oil price have plummeted to around $83 per barrel. A variety of factors have coalesced into a perfect storm driving oil prices lower and lower: US prices have fallen 25 percent to around $80 a barrel in the past five months – a large drop, given that prices had been floating around $115 dollars a barrel from 2011 onward.
In late October, Goldman Sachs revised its 2015 forecast to predict that oil prices would continue a downward slide. Goldman predicts soft demand and a glut of supply will drive West Texas Intermediate – the North American benchmark – to $70 a barrel in the second quarter of 2015. Global benchmark Brent could dip to $80 that same quarter, according to the report, when oversupply is at its peak.
There have been many outcries by Bajans on social media and the call in programs for gasoline prices and fuel oil prices (hence electricity bills) to go down with the advent of these falling crude oil prices. Minister of Lands Dennis Kelman was first to offer his explanation on the call in program. He said that government has negotiated with Trinidad to purchase gasoline and fuel oil on future contracts (buying on forwards). Since the current supply has not been exhausted, prices of gasoline would remain. This does little to explain Mr. Minister, why Bajans have seen spates when gasoline prices have increased almost every fortnight and the fuel adjustment rate on their light bills escalated unexpectedly. Are we to believe then Mr. Minister whenever we see a price hike in gasoline, it is as a result of drawing down a new negotiated shipment from Trinidad?
The obvious question then that follows Mr. Minister, since we have these negotiated forward contracts, why is John Public and \or businessmen not privy to such scheduled pricing? With such information in hand, they can ‘forward plan’ and\or reschedule thereby reducing business cost?
As one caller to the call-in program most unctuously put it, “to us it seems as if increasing\decreasing gasoline and fuel oil pricing is being done ‘willy nilly’. “It seems as if when government has a shortfall for cash in one area, it increases gasoline and fuel oil prices to compensate.”
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