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Manufacturing, Energy, Government

Study By PRMA Energy Committee To Reconfirm That Fuel Is Less Expensive In Free Enterprise System

Industry has adequate storage levels and various sources in case of war


February 6, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

"An energy return on investment study commissioned by the Puerto Rico Manufacturers Association’s (PRMA) Energy Committee is expected to confirm that the price of fuel would be less expensive in a free enterprise system than if regulatory controls were imposed by the government," said Jorge E. Concha, Esso Standard Oil Co. (P.R.) president & general manager.

"The PRMA Energy Committee is committed to guaranteeing adequate fuel distribution to the island under normal and extraordinary circumstances," said Concha. "[Last week] we sent a letter to Javier Echevarria, Puerto Rico Department of Consumer Affairs [known in Spanish as DACO] secretary, reassuring him that our industry is maintaining adequate storage levels of our products and that it has diverse, secure, and trustworthy sources to continue its imports and the distribution of fuel to Puerto Rico’s consumers."

The fluctuation in the price of gasoline has caused speculation among consumers about who is at the wheel. Before 1996, DACO’s return on investment formula for wholesalers added $0.05 more to the per-gallon price than if the price had been determined by competition. A 2001 study by economist Jorge Freyre confirmed this information, and expectations are that the latest study will find no significant changes.

Concha was recently elected to head the PRMA Energy committee, along with Raul Rivera Avila, Texaco Puerto Rico Inc. Government & Industrial Relations manager, as vice president. Otto Bustelo Esq. is executive director of the committee, whose members include AES Puerto Rico LP, American Petroleum Inc., Caribbean Petroleum Corp., Citgo-GPR, Enron, Esso, Peerless Oil & Chemicals Inc., Philips-Chevron Puerto Rico Core, Texaco, and The Shell Co. (PR) Ltd.

The Energy Committee, established in 1971, discusses and promotes issues related to Puerto Rico’s energy industry. It is still working to strike a 1996 regulation approved by the Department of Consumer Affairs that adjusts gasoline prices according to temperature. Studies by Freyre have calculated the cost to install automatic temperature compensators on the gasoline hoses at 1,330 gas stations and the 350 tanker trucks at between $80 million and $90 million.

This Caribbean Business article appears courtesy of Casiano Communications.
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