One of the biggest fears of locals is that the shutdown of the Hovensa refinery on St. Croix will mean the Territory is going to be starved for gasoline. If not starved, then raped price-wise.
The St. Croix refinery is the source of gasoline for all three islands. And to judge by recent comments from the president of Hovensa, it will continue to be. But, still no one knows, at what price?
Speaking to the Tourism Association's annual meeting, Brian Lever outlined a scenario in which Hovensa continued to operate primarily as a warehouse and depot for other companies' refined products.
The St. John Source's report of Lever's speech had the executive saying, "Hovensa intends to purchase gasoline from other companies and resell it to local gas stations." (Full story here.)
Lever indicated the storage facilities could be attractive to petroleum product buyers who want to take advantage of low prices and just hold the product. Others, shipping companies for example, might want to use St. Croix as a refueling station.
Hoivensa has alreadyt said it will continue toi deliver gasoline for retauilers until the end of the year.
The average price of regular gasoline on St. John is now $4.439 a gallon, according to a suyrvey by the Department of Licensing and Consumer Affairs.
The average price of a gallon of gasoline on St John… Very easy to calculate with only one gas station.
I read recently that a national airline has purchased a recently closed refinery in Philadelphia. They intend to continue operations as a refinery selling all grades of fuel as well as producing their fuel at a greatly reduced price.
Could Hovensa be purchased by a major cruise line and do the same, selling refined oil products as well as producing fuel for their ships? St Croix would also benefit from the bunkering of cruise ships.
HOVENSA won’t sell to anyone that might benefit from the acquisition or affect Hess Oil’s bottom line through competition or self serving production. Beyond that, the option to build a completely new, State of the Art refinery in St. Lucia, by agreement with the Lucian Gov’t., is always in their back pocket, even though they claim “no current plans.”
That is the law of the supply and demand curve.
If there are little supply, of course the prices would rise up.