Friday September 30, 2005, St. George’s:

The retail price of petroleum products in Grenada has been frozen since December 22, 2000. Both the Government and the Petroleum Marketing Companies (Shell and Texaco) have been subsidizing these prices at the pump. Government through the giving up of taxes and Shell and Texaco through paying the shortfall to the middle company from whom they purchase.

As a result, these companies have suffered heavy losses in their operations, since their fixed and regulated profit margins were not guaranteed. Effective October 1st, 2005, the retail prices of petroleum products will experience the following change:

Grenada:

Old Price New Price

Gasolene $7.50 /IG $10.89 /IG

Diesel $7.00 /IG $10.89 /IG

Kerosene $5.48 /IG $9.73 /IG

L.P.G (Cooking Gas)

20 lbs Cylinder $30.79 $40.05

100 lbs Cylinder $151.44 $197.77

Bulk $1.50 /lb. $1.97 /lb.

Carriacou:

Old Price New Price

Gasolene $7.75 /IG $11.08/IG

Diesel $7.22 /IG $11.08 /IG

Kerosene $5.65 /IG $9.90 /IG

L.P.G (Cooking Gas)

20 lbs Cylinder $35.29 $44.55

100 lbs Cylinder $165.94 $212.27

Bulk $1.50 /lb. $1.97 /lb.

The new Retail Prices are computed based on FOB costs effective September 21, 2005.

We wish to advise that instead of a predicted CIF price of $9.04, the CIF price of gasoline rose to $9.97 on 27th September 2005. Therefore without any taxes, only dealer and wholesaler margins of 90 and 95 cents respectively, the selling price to the public should be $11.82 instead of the $10.89 that it will be sold for.

The wholesalers have agreed to carry the required deficit of 93 cents on a gallon until the next shipment in ten days at which time the CIF price for this next shipment will be known and the retail price will then be set to recoup the loss from 1st October.

Consumers are advised that they should do everything to conserve the use of fuel and other forms of energy such as electricity.

The drastic increase in prices removed any buffer that would have allowed for cross subsidizing and thereby reducing the increase in the price of LPG to the public

(Submitted by the Energy Division, Ministry of Agriculture)