Oct. 7, 2004 The government announced new limits on gasoline sales profits Thursday, citing a study showing that prices in the U.S. Virgin Islands are among the highest in the world before added taxes, according to a report in Forbes magazine. (See "Virgin Islanders' Cost for Gas Way Above Average").
Starting Oct. 15, gasoline wholesalers will be allowed a profit of .30 per gallon, while retailers will be allowed a .35 profit, Andrew Rutnik, commissioner of the licensing and consumer affairs department, said
According to a study Rutnik conducted, V.I. motorists pay an average of $1.82 per gallon of regular and premium gasoline before a $0.14 tax is added. In the U.S. mainland, the average price is $1.55 before a $0.42 tax is added.
"Our actions were done with prior research of the facts and an extensive study of the financial viability of the industry as a whole," Rutnik said.
Prices are high even though the territory is home to Hovensa, the Western Hemisphere's second-largest oil refinery. The refinery, on St. Croix, can produce 21 million gallons of gasoline a day.
Because there is no need for a shipping agent on St. Croix, prices are lower, encouraging competition among independent gas stations. On St. Thomas and St. John, however, corporate chain stations like Domino and Esso set a confidential price with tanker ships that bring the gasoline from St. Croix, resulting in higher prices.
The new profit limits won't apply to Hovensa because a pre-existing agreement between the refinery and the territory's government exempts it from most price regulations, Rutnik said. So only stations, or corporate chains, that can be identified as exceeding the new profit limit would be in violation of the new limits.
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