The Department of Economic Policy and Research (DEPR) held a press conference today in the Claude Wathey Legislative Hall to explain the 40 cents rise in the gas price.
The rebounding global economy has led to increase demand for oil and energy and has led to an upward push in world oil prices.
As a result, local prices of petroleum products must increase accordingly, including a buffer for future increases, and will be adjusted according to international market developments.
It is hoped that prices will not go much up in the future, but that is not a controllable factor. Businesses as well should not take advantage of the gas situation to raise prices on products, for the Department will be on the lookout of such actions. So businesses have to remain competitive.
Louis Halley, a Senior Policy Advisor, presented the latest developments, Halley stated that there is speculation that the US economy is recovering (drop in jobless claims). Factors that are affecting the current price per barrel of $70 in June 2009, are that there is low production capacity; that crude oil prices tend to peak during this period;; that the rising demand for gas in the summer months in the United States and high oil prices due to strong global demand (especially in China).
Currently the gas wholesalers on St. Maarten are operating at a loss. The price of gas is regulated by the Island Government of St. Maarten; thus for the wholesalers to continue to remain profitable, there needs to be an adjustment in prices.