Aug. 16, 2008 — Gas prices have dropped significantly across the territory recently.
Hovensa's new rack rate went into effect Wednesday, showing a drop of 14.5 cents for regular unleaded, down to $3.17 per gallon. Premium is down 16 cents to $3.55 and diesel is down 19 cents to $3.55, according to a statement from the V.I. Department of Licensing and Consumer Affairs.
The rack rate, which includes a 7 cent fuel tax, is the rate Hovensa sells to independent gas station operators on St. Croix, St. Thomas, and St. John.
"This significant reduction in the price of gasoline provides an excellent opportunity for wholesalers and retailers to pass these savings on to consumers by reducing retail prices at the pump," DLCA Commissioner Kenrick Robertson said in the statement. "DLCA will release a territory-wide fuel price survey after this new rack rate goes into effect to ensure the public is up to speed on where to find the best possible bargain on gasoline."
The local drop mirrors the national trend, where the U.S. average retail price for regular gasoline fell for the fifth consecutive week, according to the federal government's Energy Information Agency. Retail prices are higher than the wholesale rack rate retailers pay, but the two are closely tied to one another. The average national retail price for regular gas has dropped 30.5 cents from an all-time high of $4.11 set on July 7, according to the EIA.
It also reflects a drop in the price of Venezuelan crude oil. By contract, at least half of Hovensa's unrefined crude comes from Venezuela.
The Venezuela Tia Juana light crude spot price at the port has dropped to $116.93 a barrel from an all time high of $137.98 set on July 4. The exact price Hovensa pays for oil is a closely guarded business secret, but spokesmen for the refinery have said it is tied to and very close to the published market spot prices.
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