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Charlotte Amalie
Saturday, July 13, 2024


April 6, 2004 – After having imposed a 30-day freeze on gasoline prices at the pump on April 1, Licensing and Consumer Affairs Commissioner Andrew Rutnik issued an amendment on Tuesday for motor and marine fuel retailers on St. Croix.
Because the Hovensa refinery, which supplies retailers on St. Croix, recently raised its gas prices to those customers, a DLCA release issued on Tuesday stated, the retailers on the island have permission to raise their prices 7 cents a gallon for regular gas and 9 cents a gallon for premium.
Hovensa's most recent price adjustments to its local customers were increases of 5 cents a gallon for regular and 7 cents for premium, along with a decrease of 2.5 cents a gallon for diesel fuel.
The price freeze remains in effect unchanged for retailers on St. Thomas and St. John, which get their supplies from distributors that import fuel.
Rutnik said the freeze was put into effect "because of the need to control the prices of fuel in the territory during the implementation of the flexible petroleum tax.." The tax legally took effect on March 23, but Rutnik said no effort was made to begin collecting it, because of the failure of some companies to return survey questionnaires aimed at determining why gasoline in the territory sells for such disparate prices.
An April 1 DLCA release stated that the 30-day period "will allow the Bureau of Internal Revenue and the Department of Licensing and Consumer Affairs to implement the new tax and negotiate with the wholesalers on the particulars of how it will be collected. It will also allow DLCA more time to complete the fuel study authorized by the governor and his financial team."
Meantime, any business that arbitrarily raises its prices above the levels in place on April 1 – or above the increases granted on Tuesday for St. Croix – will incur a fine of $200 a day, Tuesday's DLCA release stated. However, the April 1 order does allow for retailers to petition the department for permission to institute increases "to meet operating and other expenses." (See "Gas prices frozen as new tax being implemented".)
Alexander A. Moorhead, Hovensa vice president for government affairs and community relations, said on Tuesday that Rutnik's price-freeze order "applies only to the retail price of gasoline." He added, "Whether Hovensa is considered to be a manufacturer or wholesaler of gasoline in the Virgin Islands, the order does not freeze the price of gasoline at either of those levels of sale."
Hovensa's recent increases to its St. Croix customers represent "a normal adjustment of gasoline prices," Moorhead said on Monday. "The price of crude and the market price of gasoline continued to increase nationally, and we have to pass on our increase in cost."
According to national media reports published on Tuesday, the U.S. Energy Office said the average U.S. retail price for regular gasoline rose 2.2 cents a gallon in the last week to a record $1.78 — and it was the eighth increase in nine weeks. Pump prices have jumped 30.2 cents, or 20 percent, since Jan. 1, according to the department.
Meanwhile, the AAA – formerly the American Automobile Association – set the national average at $1.77 a gallon, and said pump prices have risen about 5 cents in the last month and more than 13 cents from a year ago.
The AAA statistics are from the club's survey of more than 60,000 filling stations. The Energy Office data are from its survey of some 900 retail outlets in all 50 states.
Last week, the Organization of Petroleum-Exporting Countries decided to implement a reduction of 1 million barrels a day in oil supplies to counter an expected decline in global demand this spring. "The fact that the summer driving season hasn't even started and OPEC is implementing a new output cut means things are likely to get worse at the pumps before they get better,'' AAA spokesman Mantill Williams said.
Mainland pump prices for regular remained highest in California, the Energy Department said, rising 4.7 cents in a week to $2.126.
U.S. gasoline supplies stayed below normal for much of the winter as refineries slowed oil processing for annual maintenance and in some cases had unplanned shutdowns. Crude-oil reserves remain below normal but have risen from a 28-year low in January amid stronger world demand, especially from China, analysts said.
The DLCA release stated that V.I. retailers and wholesalers who have questions about the price freeze should call Alli Paul, director of consumer protection services, at 773-2226 on St. Croix, or Rutnik at 774-3130 on St. Thomas.

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