The price of all grades of fuel: premium, regular and diesel has been trending down - in response to falling world prices of oil. But while world oil prices are at a five year low - critics say that kind of downward trend is not being adequately reflected at the gas pump in Belize. Yesterday in our conversation with the man we call the fuel czar, John Mencias we asked him about the price formula and the apparent lag between world and local prices:..

Jules Vasquez
"Diesel is selling at about over $6.50 for gallon of diesel in Honduras and that's the same PetroCaribe fuel. When will the fuel price in Belize reflect the plummeting world price of oil."

John Mencias, Dep. Chmn - APBEL (Alba Petrocaribe Belize Energy Limited)
"But it is already affecting it. Diesel is down to $8.69, regular and premium are under $10 now and I think they will fall even more. It doesn't follow - as soon as the price of crude oil drops, the price of diesel will drop, no. There is sometimes a delay and it also supply on supply and demand for the individual refine product. It's not so straightforward. Between the 13th - 19th November, which is the date range over which we received our last shipment, look at crude oil prices. This is what it was; average of US$74.96 per barrel. Look at what the diesel prices were at the gulf coast prices - US$92.00; regular US$81.00 and what people are thing is that okay, this is the price. But what happen is that using that diesel price of US$92.00, the price at the pump ends up being BZ$8.69. But if you use this price that people are thinking that is being used US$74.00; the price at the pump would have been BZ$7.71, but this is not the price that you are to use here, it's the actual of the refine product, the diesel, not the crude oil price. But let's understand the reality. The pump price is made up of a fixed portion and a variable portion which varies according to the price of oil that we receive from Venezuela or wherever. But there is the other portion; import duty, handling at the port, port dues and all that, wholesale margin. I think for diesel that fixed cost account for about 28% of the total cost and for regular, its higher. It's close to 40%. But if you were to remove that, then you would have these lower prices. But then again if you remove that, government will not have its taxes."

Jules Vasquez
"And PUMA will not have its profits?"

John Mencias
"Well, PUMA has to make a profit of course. They are providing a service, so it stands to reason that they will make a profit."

Jules Vasquez
"Is it fair to say that profits have increased?"

John Mencias
"No. Well, let's put it this way. What was happening before, whatever profits were being made before, that has not increased. In terms of the Belizean people being charged more since the program has started, no. So if this program was to go away, the pump prices that people are experiencing right now would roughly be the same."

And while Mencias says PUMA's profits are the same - we'll have to grudgingly take his word for it because they are a multinational - and we can't see what their bottom line is.

But, we know that right off the top - Mencias - who is also chairman of the Central Bank has been putting them to the front of the queue for foreign exchange. We as ked him about this preferential treatment:..

Jules Vasquez
"A directive was sent to the banks that foreign exchange must be prioritize for PUMA. I know at least one bank complained bitterly about it. What's the rationale behind that?"

John Mencias, Dep. Chmn - APBEL (Alba Petrocaribe Belize Energy Limited)
"Well, I think you are saying that foreign exchange must be sold to people who need it. I think that is what you mean."

Jules Vasquez
"Yes, that PUMA should be prioritized."

John Mencias
"I think the situation was that PUMA was trying to get foreign exchange from a couple of the banks and couldn't get it and so the Central Bank had to intervene, as it should in such a case."

Jules Vasquez
"Yes, but then how can the interest of a multinational...?

John Mencias
"That is the way you are looking at it. You have to look at the interest of Belize. We need to pay for the fuel. It's as simple as that. The country needs to pay for the fuel and fuel as everybody knows is so important. PUMA has to pay TRAFIGURA for the fuel and TRAFIGURA pays APBEL and we pay PDVSA (Petroleum of Venezuela) and the Government of Belize gets the finance portion."

Channel 7