Cooking gas price drop causing some confusion

Opposition Leader Arnhim Eustace has said that retailers of Liquified Petroleum Gas (LPG) have been thrown in a state of confusion over the reduced cost of the product, which came into effect yesterday.

Eustace, speaking on the New Times radio programme yesterday, said that little attention had been paid to these retailers, {{more}}who had already purchased stocks at the older, higher prices, and would now be selling that stock at the new price, at a loss, unless there is cooperation in determining at what price that stock should be sold going forward.

On Friday last week, the Government announced that the maximum retail price for 20-pound cylinders of LPG (cooking gas) had been reduced to $29 (Areas I and II), $30 (Area III) and $33 (Area IV), down from $41.80 and higher.

25-pound cylinders are now $36.25 in all areas and 100-pound cylinders are at $138 (Areas I, II and III) and $159 (Area IV).

The prices of diesel and gasoline have also been reduced, with gasoline now going at $11.47 per gallon, low sulphur diesel at $11.79, and diesel at $11.04 per gallon.

“Because people have a stock of gas which they paid for when the price was high…Those people can’t turn around and sell those stocks cheap this morning… they would be selling at a loss, and the margin for the retailer in this gas business is not high, you know; it is about three dollars and something, and you would have to deal with those persons who are retailing it to make sure that they are not being put out of pocket,” Eustace commented.

SEARCHLIGHT visited a number of business places in Kingstown that retail LPG, but the managers of these business places refused to comment publicly.

One individual said he opted not to comment, because he was not yet clear on the issue surrounding the LPG.

SEARCHLIGHT observed an interaction at one location, where a customer turned up to purchase gas, producing $40 for the transaction.

The man was refused the sale until he produced an additional $2.

As the man took the gas and lamented about the gas still being sold at the old price, the shop attendant handed him back his money and told him to put the gas bottle back.

The Opposition Leader suggested that there should have been some interaction between the price regulators and the retailers before the price adjustment was made.

“A week or so ago the Government should have sat down and discussed how we are going to deal with the existing stocks of gas that people have to sell, because you know that they purchased those supplies before you reduced the price, it is obvious. So, sit down with them  and negotiate something, so they don’t lose.

“It’s a serious matter and it don’t take any big thought to recognize what was going to happen, that should be obvious to the Government. You want to rush to make announcement… You haven’t had the time to discuss with the retailers what this means to them.

“People are in business; they want their business to survive; they have to look after their own families. You take a decision which causes them to sell at a loss without involving them in it. You can’t do that. Nobody even call them on the weekend, so I don’t know how many of them are selling today, because they are at a loss of what to do. So they will be losing some sales and if they sell they are going to lose money,” Eustace added.

SEARCHLIGHT tried yesterday, to reach the local managers of SOL EC Ltd and Rubis, the two main distributors of LPG here, but in both cases, we were told that they were in meetings and were expected to remain there for the rest of the day.

Meanwhile, Prime Minister Dr Ralph Gonsalves, speaking on Star Radio yesterday, indicated that the new fuel prices are the law.

He noted that he expected the price of the PetroCaribe LPG gas to decrease as well.

“When you go to the pump today, the price is what we say it is, and when you go for the LPG, that’s the maximum price. 

“I made the point to you that the PetroCaribe LPG, which is usually less, although it’s two pounds more; I expect that before the end of the day that they will announce for the 22-pound cylinder to be less than $29, and their 100-pound cylinder to be less than the $138, because the LPG from PetroCaribe tends to be a couple dollars less.”