WILLEMSTAD - There is an ongoing discussion about the continuous increase in fuel prices, while the recent report from SGS Inspire clearly states that the quality of fuel imported to Curaçao is poor and affects the performance of a large number of vehicles, says Member of Parliament for the coalition party MF Ramón Yung.
In an extraordinary Council of Ministers meeting on Monday, May 8th, a decision will have to be made regarding a possible increase in fuel prices. Minister of Economy Ruisandro Cijntje, indicates that the Council of Ministers must choose between a price increase of 16 cents per liter or 29 cents per liter. In the case of choosing a 16-cent increase, it means that the turnover tax (OB) on fuel will be eliminated at the time of importation, and only the consumer will be charged with the OB at the time of purchase.
Minister of Finance, Javier Silvania, on his part, indicates that there is no room to maintain the "instruction" on fuel price mitigation, as it is not incorporated in the 2023 budget. In the case of opting for a 16-cent increase, it would mean that each ministry will have to make budget cuts of around 1.42 million to cover the elimination of the OB on fuel importation, totaling 12.8 million guilders.
The MP asks, "How is it possible that we are discussing an increase in fuel prices while a recent report from SGS Inspire clearly states and confirms that the quality of imported fuel is very poor?"
Yung says he is aware that these two points of discussion are completely disconnected from each other, but the people who will have to pay for the increase do not understand this. Since it became known that the fuel quality is poor, people expect the first step to be finding a solution to compensate for the low quality of fuel.
According to the MP, the reality is that the results of the SGS Inspire report were made public precisely at the moment when the regulator BTP calculated the fuel prices and indicated that there would be a major increase.
For the MP, now more than ever, the Minister of Economic Affairs needs to sit down with both Curoil and gas station operators so that they can establish a position and demonstrate solidarity with the people of Curaçao regarding possible actions that can be taken to mitigate the impact and potential increase in fuel prices.
Because previously, the minister indicated that in discussions with Curoil, the company would have had to say that the profit margin on fuel sales should be 25 cents instead of 17.5 cents so that they can cover all their operational expenses.
However, the SGS Inspire report indicates that both the profit margin for Curoil on reselling fuel and the profit margin for gas station owners are substantial. SGS Inspire explicitly states that "the margin Curoil is a fixed margin to cover the cost of storage and distribution (including a reasonable profit margin)."
In the case of gas station owners, SGS Inspire also indicates that "the dealer margin covers the gas station's operating costs regarding distribution and delivery (including a reasonable profit margin)."
Previously, it was difficult to obtain figures for fuel sales at gas stations because they were not provided to the government. But with the SGS Inspire report, it can be seen that a gas station must have at least 2 tanks for each product they sell, namely gasoline and diesel. These tanks have a capacity of between 30,000 to 37,000 liters of product, and they are refilled approximately every two days. Any citizen can do a mathematical calculation of the sales volume and profit of a gas station monthly, considering that the profit margin on both gasoline and diesel is 17.5 cents per liter.
In the case of Curoil, as the sole supplier selling fuel to gas stations with a profit margin of 11.1 cents per liter of gasoline and 10.5 cents per liter of diesel, once again, any citizen can calculate the sales volume that 29 gas stations around Curaçao can generate for Curoil.
Therefore, in the opinion of the MFK MP, all stakeholders in the fuel sector should come together and align themselves with the SGS Inspire report, moving in the same direction so that the community can benefit from the situation. The people are complaining, and there is no room for further threats and intimidation regarding more price increases, especially when the report speaks of poor fuel quality. Ultimately, considering the poor fuel quality, Parliamentarian Ramón Yung believes that a transition period of 2 years to achieve better fuel quality is no longer acceptable.