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#409176 - 06/03/11 10:54 AM INCREASE IN PRICE OF BUTANE
Marty Offline
If you haven’t yet filled up your butane tank, well, now would be a good time to do so. That’s because the price is going to go up, by at least eight dollars in the first instance, and then another six dollars. The acquisition cost of liquid petroleum gases increased by fourteen dollars since January and now, that has been a sore point for importers who have been clamouring for the equivalent in increase in prices. Currently, imported butane retails for a hundred and twenty six dollars per hundred pound cylinder or a dollar and twenty six cents per pound. Butane from the Belize Natural Energy sells for ninety two dollars per hundred pound cylinder or ninety two cents per pound. BNE Marketing Manager, Daniel Gutierrez, told Love News today that even if the imported butane increases, the price of the local product will remain the same. But the importers are not happy with government’s unwillingness to bend to their demands – that of immediately increasing the price to a hundred and forty dollars per hundred pound cylinder and also to extend the deadline for the mandatory use of scales. Chairman of Cabinet sub-Committee on commodities, Minister John Saldivar, chaired the meeting this morning at the Belize Biltmore Plaza between the Minister of Economic Development, Erwin Contreras, and retailers, who have said that they are willing to remain open for business, and if the need arises, they can work towards importing the commodity if the importers decide to go on strike. Minister Saldivar told Love News that there will be a supply of butane on the market and that there need not be any worry of the product going scarce.

Minister John Saldivar – Chairman, Cabinet Sub Committee on Commodities
“It was a meeting of the retailers and other stakeholders in the butane industry other than the importers who we met with yesterday and who basically made some demands of government that government has been unable to meet and at the time of me doing this interview have not communicated to us that they are not going to withhold their butane from the consumers. The meeting just now was with the retailers and other stakeholders to come up with a contingency plan should the importers follow through on their threat to strike."

Marion Ali - Reporter
What is the gripe?

Minister John Saldivar – Chairman, Cabinet Sub Committee on Commodities
“Two things, one, they made a demand for a further 30 day extension to the requirement for them to have scales on their trucks and they were demanding also a $14.00 increase in the price of the 100 pound cylinder butane, none of which Government could agree to. We certainly could not agree to any further extension on the issue of the scale because we believe that consumers have waited long enough for us to put this measure in place to ensure that consumers get what they are paying for. In terms of $14.00 increase, I can say the last increase was in January and that during that time the acquisition price of butane has gone up by the $14.00 they are claiming, but we felt that in the current environment where the consumer has been burnt and certainly the image of the industry is not at its best that we wouldn’t want to put that entire increase on the consumer at this time. We therefore made a counter proposal to increase the price by $8.00 this month and a further $6.00 next month which they have rejected that is where we are right now. The meeting with the retailers was to make sure that if they followed through on their threat that we had a plan B to make sure that the consumers remain supplied with butane. Yes we do have the agreement from the retailers that they are prepared to remain open and we had BNE in the meeting and they are prepared to put their stock of butane into the mixture if we have to do some sort of rationing of butane and we now have stakeholders who are looking into the possibility of importing their own supply to keep the country with butane.”

We tried to get a comment from a few of the importers but they have declined, saying that they have not yet determined if they will go on strike.


#409235 - 06/04/11 09:50 AM Re: INCREASE IN PRICE OF BUTANE [Re: Marty]
Marty Offline

No Hike In Butane Prices + No Strike

Two nights ago were were facing the possibility of either a butane price hike of fourteen dollars per hundred pound cylinder or a strike by butane importers. Tonight, thanks to a sharp piece of negotiation by government - there will be neither a strike nor an across the board price hike.

In a development that is nothing short of remarkable, Belize will now have two kinds of butane to choose from, something like premium and regular gas.

The premium product will be the butane imported from Pemex in Mexico and sold by Belize Gas Limited and Western Gas Company - both companies owned by the Reyes family. Their butane is of a certified higher standard and so their product will be more expensive; instead of selling for the $126.00 that it did in the past, that will now sell for $134.00 and will be considered premium butane.

The other importers, BWEL, Southern Choice Butane or Zeta Gas, and Gas Tomza - who get what government says is a lower grade butane product from Central America will continue to sell for the same maximum price of $126.00 per cylinder in the city. Their product will be considered regular butane.

It's a clever and useful piece of negotiation because in the past, the controlled price for a hundred pound cylinder of butane was arrived at by averaging out the cost from all importers: the PEMEX product was always more expensive so it drove up the average price.

But now that has been unhitched from the price formula and declared to be a premium product, leaving the price of regular butane unchanged.

That's good news for consumers who just two days ago were staring down the barrel of a record high price of $136.00 or $142.00 for butane. And yes, there is a new high price but it is only for premium butane.

Public Service Minister John Saldivar led the negotiation which concluded today in Belmopan and he gave us an outline of the new price structure regime:

Hon. John Saldivar, Minister of Public Service
"So we kind of have the same kind of differentiation that we do with gasoline where you now have premium butane and a regular butane. It keeps the general price of butane where it is now and it allows for consumers that have preference to get it if they are prepared to pay the higher price. We are certainly happy with the outcome Jules and we are glad that all sides have been able to walk away from this feeling satisfied that we have done our best. Through negotiations we have arrive at a position where consumers can benefit. The suppliers can feel comfortable and government has feel good that it has defended the interest of our consumers."

Government hopes to have standards set across the board for various types of butane - or as the case may be, propane by September.

We note that what we refer to as butane is actually liquid petroleum gas, a combination of propane and butane. A 60/40 mix is considered optimal and that is what the premium butane is certified to be. However, tests we have conducted show that some importers have sold us 100% propane - which does not burn as hot and burns out quickly - it is also much cheaper for importers.

But all those formulas aside - what most consumers care about are those scales. The law went into effect on Wednesday and tonight we can confirm that there is some compliance, but there is widespread non-compliance - and those who aren't playing by the rules are being prosecuted.

That processes starts with summonses being issued from the bureau of standards - and there are about forty of those being prepared right now.

The first will go out to those butane suppliers who completely ignored the new regulations and did not even apply to for a scale to be tested.

And then there is the second group - those who are not fully compliant. There's 37 principals and agents in that group - and, yes, included in there are major importers.

Those who fail to comply with the requirement of tested scales on trucks and at the depot will receive summonses and be taken to magistrate's court where, if convicted, they will face a maximum fine of five thousand dollars or imprisonment or both.

We note that some of those 37 companies are on their way to being compliant - and may be so by the time the summons reaches them.

So, who is complying? As of yesterday, only six businesses are complying with the scale requirement.

Channel 7


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