Nov. 6, 2008 — Continued drops in the price of oil on the world market will soon translate into more savings at the pump for local residents, according to Gov. John deJongh Jr., who announced Thursday Hovensa's plans for another decrease in its rack rates: 46 cents less for regular gas, 49-cents less for premium and 19-cents less for diesel fuel.
The reductions go into effect Friday.
The V.I. Water and Power Authority will be filing Friday another petition for a reduction in Levelized Energy Adjustment Clause (LEAC) rates, which would — if approved by the Public Services Commission — go into effect Jan. 1.
While WAPAs petition to the PSC will seek a significant reduction as of January 1st, I am today urging the members of the commission to continue their recent practice of passing on the LEAC cuts immediately and I urge them to consider moving up the date at which WAPA can reduce its LEAC charge," deJongh said. "Our WAPA ratepayers have endured much hardship as the cost of oil skyrocketed leading to dramatic increases in WAPAs cost of generating electricity. Any reduction in cost must be passed on immediately to consumers."
WAPA's most recent petition for an 18-percent reduction in LEAC rates went into effect at the beginning of last month. (See "Electric Bills Drop 18 Percent Immediately").
DeJongh said Thursday he hopes another reduction would be possible by the end of the year.
The latest decrease in the price of oil prompted deJongh to re-issue his call for local gas stations to continue to quickly pass on the savings to local consumers. Branded gas stations such as Esso and Texaco have "generally" been "slow" in dropping their prices, while privately owned stations, such as Gasworks and Racetrack on St. Thomas, have "passed on the savings more quickly," according to the release.
My belief is that all of these recent motor vehicle fuel price reductions must be fully passed on to customers without delay, the governor said. The commissioner of Licensing and Consumer Affairs has been instructed to closely monitor local gas prices and keep the public information of any significant market changes in the cost of gas or diesel fuel, he added.
In late October, DLCA issued subpoenas to gasoline suppliers Texaco, Esso and Domino, seeking detailed information about their pricing and sales of gasoline in the territory. The administration is seeking specific information from the companies in order to determine what causes and justifies the significant price difference in the cost of fuel between St. Croix and St. Thomas.
Texaco and Esso purchase fuel from Hovensa, while Domino purchases its fuel supply from Catcor Corporation in Puerto Rico.
A subpoena issued to Hovensa requires the company to provide verified copies of all invoices for all grades of gasoline sold to the gas stations, along with all invoices for propane sold to Antilles Gas in both districts and to St. Thomas Gas and St. Croix Gas.
Information requested in the subpeonas was for the period Jan. 1 to Oct. 31, 2008, and must be submitted to DLCA by Nov. 7. In correspondence to the gas companies and Hovensa, DLCA Commissioner Kenrick Robertson wrote that while the prices of gasoline and other fuel products have been dropping since about July of this year, "we noticed that the retail price of gasoline and propane here in the Virgin Islands is not declining as rapidly as in other parts of the United States." (See "DLCA Subpoenas Texaco, Esso, Domino Records").
Between mid-August and the end of October, Hovensa made four significant rack-rate reductions, decreasing the cost of fuel purchased in the territory by $1.34 and the wholesale price by 75-cents for regular, premium and diesel fuel, according to a news release issued by DLCA Monday morning.
A recent DLCA survey completed at the end of last month showed that local gas stations bought fuel at $2.04 per gallon for regular, $2.24 per gallon for premium and $2.41 per gallon for diesel during that period, the release said.
While the average price per gallon of regular gasoline on St. Croix was $2.68, the survey revealed that 11 stations on the island were selling gas at lower rates. Get N Go Service Station had the cheapest regular gasoline at $2.56 per gallon, the release said.
On St. Thomas, all five Domino gas station offered customers the "best bargains," selling at $3.50 per gallon for full-service regular gasoline and $3.63 per gallon for premium, according to the survey.
On St. John, E&C Gasoline beat out Domino, selling its regular gasoline at $3.38 per gallon.
We have seen significant reductions in the wholesale cost of fuel purchased from HOVENSA with little change in retail numbers in the St. Thomas-St. John district until now," Roberston said in the Monday news release. We will continue our monitoring efforts and pressure retailers to honor their responsibility to Virgin Islands residents and consumers to experience the long awaited relief from the high cost of gasoline.
Hovensa's rack rate — the price at which Hovensa sells its fuel to gas station operators — also includes a 7-cent fuel tax.
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