Fuel Prices
Statement by Chief Minister Dr. the Honourable D. Orlando Smith, OBE
Thirtieth Sitting of the First Session
Of the Fifteenth Legislative Council of the Virgin Islands
Thursday 15th, September, 2005
Madam Speaker, the British Virgin Islands like many other developing countries relies heavily on fossil fuel commonly known as oil, and it’s refined by- products. These include various grades of lubricating oils, gasoline, diesel fuel, and propane on which we are heavily dependant. It fuels our cars, boats, buses, and other various forms of transportation, and is an essential ingredient in many aspects of our lives.
It is consumed in the preparation of our daily meals, and the supply and delivery of everyday products which we require, and it is currently mandatory for creating the electrical energy on which our day to day activities depend. If some thought is given to this, we will quickly realize that there are very few things in our everyday life that are not dependant on some form of oil by-product. Our daily life, tourism economy, and marine industry are therefore very heavily affected by the price of oil and continue to reel from ever increasing prices.
The world oil prices have risen from approximately $30 per barrel in 2003, to in excess of $55 per barrel in the last month, and has climbed over 45% since 2004. Fears of scarcity and low demand in the US market in the wake of hurricane Katrina have further aggravated this problem. This like many other international events has affected the British Virgin Islands. Gasoline prices in this territory have risen from just over $2.00 per gallon to well in excess of $3.00 per gallon in recent weeks.
Economists estimate that every increase of $10 in the price of oil, increases inflation by 0.5%. This is a real issue, and a troubling trend. It does not segregate and differentiate, and affects each and every resident of this country. It impacts the cost of living, doing business, and providing services, and thereby touches each and every one of us in our varied walks of life. It makes the average BVIslander’s challenge of making ends meet even harder.
World Oil Magazine has indicated that oil well drilling is up 6% worldwide, as oil companies race in a frenzy to keep up with the demand for oil. The transportation sector is said to be responsible for 68% of the consumption of world oil, with gasoline utilizing two thirds of that amount. The picture the current events paint as a preview of the future is cause for concern.
This Government has not ignored this issue. Quite to the contrary we have been anxiously evaluating the situation and like many nations continuously assessing the trend and projecting the possible outcomes. We have appointed a committee to be headed by Hon Dr. Kederick Pickering and Hon. Elmore Stoutt to look into this matter and advise this Government on ways we can assist with this problem:
1. in and effort to ease the burden on the consumers,
2. to plan for the future
3. and possibly reduce our dependence on fossil fuels through utilization of alternative energy sources.
Madam Speaker, we foresee the possibility of many solutions being placed on the table including and not limited to some form of financial or economic intervention, as well as long term solutions which may require adjustment in the way we go about our day to day business, and utilize oil. I expect that we will join many other countries worldwide in our quest to develop a long term energy plan capable of sustaining our economies while reducing our oil dependency.
In the meantime however, we will endeavor to address the immediate strain being felt by BV Islanders and report back to you the people, on our findings and plans.
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