Butane Companies Come Around To GOB’s Price Solution, But For How Long?
All this week - the Central American companies that import butane or LPG into Belize have been shorting their supply. They've also threatened to cut off that supply - trying to force government into the second increase in a week. As we reported, last week Friday's increase pushed the price per hundred pound cylinder up by seven dollars.
But the suppliers say world prices have cut deep into their margins, and they need the increase. But, after a few tough days of negotiation with the Bureau of Standards and the Ministry of Economic Development, all sides have agreed that the price will remain as is - for now.
A release issued this afternoon says quote, "The Government of Belizeâ€¦has arrived at a successful agreement with the importers of LPGâ€¦the supply of LPG to Belize will remain uninterrupted."
The release goes unto say, quote, "there will be no immediate adjustment to the controlled price of LPGâ€¦.(but) LPG prices are subject to seasonal adjustments, volatility of which is pegged to external market dynamics, specifically, the price of oil and climatic conditions."
So, that makes it clear that the price is volatile - but one factor they didn't add was political volatility. It is widely felt by seasoned observers that Government will not allow a price increase with two months to go before municipal elections.
COLA Activist Geovannie Brackett added to that. He said that he has specific information which says that the increase is being deliberately held off until after the election:
Geovannie Brackett, President - COLA
"We were told that your prices after the election cam go up as much as $14-$20 and that is to make up for the loss of the butane companies will take, because this increase that the government will have initiate before the municipal will not be reflected in your butane prices before the election, which means the company has to swallow that up. This is all because the government in my view and in our view at COLA is strapped for cash and so it could be a way of fund raising and so the butane companies is in a predicament and I know that the argument or butane imports massly comes from Guatemala and in our view it seem incestuous - all these companies, because it's like a dragon with multiple heads. We should not be having 100% or a large portion of our energy coming from a country that doesn't respect us."
The LPG importers were reportedly requesting an increase up to 120 dollars per hundred pound cylinder.
In the past, Belize had butane supply from Mexico and Central America - but the suppliers who imported from Mexico have been bought out by the Central American companies.
Before last week's increase, the price of butane or LPG had not increased for one year.
SUPPLY OF LIQUEFIED PETROLEUM GAS
The Government of Belize (GOB) through the Supplies Control Unit (SCU), would like to advise the general public that it has arrived at a successful agreement with the importers of LPG and wishes to inform that the supply of LPG to Belize will remain uninterrupted.
The GOB further advises that there will be no immediate adjustment to the controlled price of LPG following the last adjustment issued on January 13th, 2018. LPG prices are subject to seasonal adjustments, volatility of which is pegged to external market dynamics, specifically, the price of oil and climatic conditions. Despite this, the GOB has not adjusted the controlled prices for LPG since January of 2017.
The Government of Belize will continue to ensure stability in the controlled price of LPG to consumers and at the same time secure its continuous supply for all end users.