Gas prices up today

POSTED: 02/14/13 12:39 PM

St. Maarten – The price of unleaded gas goes up today from 2.56 to 2.67 guilders ($1.43 to $1.49). the price of diesel increases from 2.24 to 2.29 guilders ($1.25 to $1.279).

The Ministry of Economic affairs gave an extensive explanation for the price increase. The first reason mentioned is the closure of the petroleum company Petrotrin in Trinidad and Tobago. This is the main supplier for St. Maarten. Petrorin is unable to supply the Caribbean region until the end of this month. The situation started back in October of last year.

High crude oil prices are a second factor that contributes to higher gas prices at the pump. The ministry stated that 72 percent of the gas price is determined by crude oil prices. The remaining 28 percent comes from distribution and taxes.

The ministry furthermore states that the 40 percent decline in the value of the American dollar has led to upward pressure on oil prices.

“The reason why the prices on international level are going up right now is because they are expected to rise every spring. It seems to get earlier and earlier each year,” the ministry states in its press release. “Oil future traders know demand for gas rises in the summer. They start therefore buying oil futures contracts in the spring in anticipation of that price rise.”

Lastly, the ministry points to the war games Iran started in the winter of 2012 near the Strait of Hormuz. “If Iran threatens to close the Strait it raises the fear of a dramatic decline in oil supply. Oil traders bid up the price in anticipation of such a crisis.”

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