CARIBBEAN ENERGY INFORMATION SYSTEM (CEIS) NOVEMBER 2013 ISSUE
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iesel fuel is one of the many products of refined crude oil. Diesel for many years has been the popular product consumed in the transportation, electricity and the industrial sectors in the Caribbean despite its negative impact on the environment. It is popular because of its thermal efficiency and the fact that it provides better mileage than regular gas and in the long term saves consumers money. However, the noxious emissions caused by vehicles using diesel fuel can have a negative impact on the environment and the health of citizens. It is with this in mind that governments have continued their efforts in exploring substitutes to gasoline and diesel so as to reduce the negative impact of the emissions on air quality and the environment at large. The introduction of Ethanol E-10 gas in Jamaica was one such substitute. Recently, a new type of diesel is on the scene in the Caribbean and is considered to be the “cleaner” substitute. This is the Ultra Low Sulphur Diesel otherwise known as ULSD. It is the newest addition to the Caribbean’s petroleum market and is considered to have a lower sulphur content than the regular diesel and will release less chemical pollutants into the atmosphere. But will consumers embrace this alternative? In this issue of the Petroleum Update, we seek to outline the benefits of ULSD to consumers and the environment. How is diesel derived from crude oil? Crude oil is comprised of thousands of hydrocarbons. Since each molecular chain has higher boiling points, continued on page 2/ Image source: www.dept.state.pa.us
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Caribbean Energy Information System, Scientific Research Council, Hope Gardens, Kingston 6, Jamaica 1-876-927-1779 (Telephone) 1-876-977-1840 (Fax) ceis@src-jamaica.org www.ceis-caribenergy.org
CARIBBEAN PETROLEUM UPDATE
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is a monthly Bulletin which highlights petroleum issues affecting or relevant to the Caribbean, international developments that may affect the region’s way of life and movements in oil prices and retail prices for fuel regionally.
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Call: 1-876-927-1779 | Caribbean Petroleum Update : November 2013
What is the Future of Ultra Low Sulphur Diesel (ULSD) in the Caribbean?….continued from page 1 each can be separated by their respective boiling temperatures or distillation. Distillation is a method used at oil refineries to separate crude oil into fractions for specific uses such as transport, power generation and heating. Light components such as Ethane, Propane and Naphtha (used for making gasoline) come off first from the distillation process. The heavier portion is then used to make diesel fuel. Since diesel contains larger hydrocarbon molecules, the distillation process does not produce enough of the fuel, therefore the heavier fractions are broken down into smaller compounds by thermal or catalytic cracking or a hydro cracking process to produce more of the fuel. Sulphur is a naturally occurring element that is present in crude oil from which diesel and other petroleum products are derived. In recent times diesel has been classified based on its sulphur content: ultra low sulphur, low sulphur and regular sulphur diesel. The cleaner fuel has been used extensively in parts of North America and Europe and is a flagship for other countries to emulate. From a Caribbean perspective the launch of the Ultra Low Sulphur diesel in Barbados and Jamaica is seen as a forward step by governments in the Caribbean in an attempt to improve air quality. Trinidad and Tobago is also using this type of diesel, furthermore as part of Petrotrin’s Clean Fuel Program, a ULSD unit is being constructed to produce the product. This unit will enable Petrotrin to meet stringent new diesel specifications in the local, regional and international markets The Barbados National Oil Company Limited (BNOCL) is the state importer of ULSD into the country, as an importer BNOCL would not have any control over the final price of the commodity charged at the various service stations. Barbados is looking at replacing the regular diesel with the ultra low sulphur substitute. Likewise, Petrojam is the state importer of ULSD in Jamaica, however, service stations in Jamaica will still offer both regular diesel and ULSD. Since ULSD is considered to be a more cleaner and refined diesel fuel that is aimed at reducing the harmful
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emissions from vehicles into the atmosphere and offers longevity of engines, this form of fuel is more expensive than the regular diesel fuel. According to a Gleaner article published on June 23, 2013, Mark Raynor, service manager at Kingston Industrial Garage highlighted that whilst the cost of the new diesel fuel is expensive, it will work out for consumers in the long term as using ULSD will prolong the life of their vehicle’s engines. Comparing the retail price for diesel and ULSD in Jamaica, the average price of diesel for November was J$130.06 and for ULSD J$135.06. This shows that the price of the cleaner fuel is 4% higher than the price for regular diesel. Additionally, ULSD is useful in protecting a vehicle’s engine and reducing degradation. This is due to the fact that ULSD is a diesel fuel with a substantially lower sulphur content. ULSD has a maximum sulphur content of 15 parts per million (ppm) which is considered to be cleaner for the environment while regular diesel fuel has a sulphur content of 5000 ppm. So the question now is how does ULSD contribute to the improvement in air quality and vehicular performance? Environmental and Vehicular Impact Since sulphur is naturally produced from crude oil, as such when diesel fuel is burnt in car engines it is converted to sulphur dioxide which is then emitted into the atmosphere through the exhaust pipe. Also, some of the sulphur dioxides react with water thereby forming acidic droplets. Thus using ULSD will have a positive impact on the environment as the lower sulphur content leads to lower sulphate emissions. Where manufacturers are concerned, ULSD is necessary for the operation of new diesel engines produced by manufacturers in light of increased environmental and health awareness worldwide. Manufacturers have sought to produce vehicles with improved engines that will reduce harmful emissions. In addition, due to its low sulphur content ULSD is useful in protecting a vehicle’s engine, reducing degradation and allowing motorists to get better performance from their engines. Although there are no expected harmful effects
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of ULSD on engine, there are however concerns about lubricity. Removing the sulphur from diesel reduces the fuel’s lubricating effect. However, before the fuel is sold to consumers an additive is added to enhance it lubricity. The Ultra Low Sulphur diesel fuel can be used in existing diesel engines that used regular diesel. But, whilst using ULSD will reduce degradation of the vehicle’s engine it will not guarantee improved performance and efficiency in the older vehicles. If however, the vehicle is designed for using ULSD, then the engine should demonstrate improved performance. Additionally, whilst some consumers mix fuels together such as unleaded 87 and unleaded 90 gasoline, it is not advisable to mix ULSD with regular diesel if the vehicle was designed to use ULSD. This is because later models of diesel engines are equipped with emission control technology such as a diesel particulate filter and as such mixing regular diesel with ULSD will cause damage to this filter and the overall engine. Conclusion Despite the positive impact consumers can derive from using ULSD and the potential positive impact on the environment, the fact that the price of ULSD is much
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higher than regular diesel may pose a problem to demand. Based on Rubis Energy in Jamaica, shortly after the introduction of ULSD the demand was slow. However, there has been an increase in the number of persons utilizing the product at service stations. It is hoped that the demand for ULSD will increase substantially to a point where 90% of consumers that previously used regular diesel in their vehicles will begin to use ULSD. The chances of this happening any time soon is slim though as the demand for unleaded gasoline is much higher than the demand for diesel. It is nevertheless important that consumers become more aware of the significant impact this can have on the environment and the bigger picture of global warming. Important points that consumers need to bear in mind are:
ULSD will be available at a much higher price than regular diesel. If the vehicle is designed for ULSD, consumers should not mix ULSD with regular diesel or any other fuel. Existing diesel engines can use ULSD. Regular diesel will be red in colour while ULSD will have a light yellow colour. This will assist consumers in differentiating between the two.
Image source: www.momscleanairforce.org
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Call: 1-876-927-1779 | Caribbean Petroleum Update : November 2013
PETROLEUM NEWS & HAPPENINGS Petrotrin welcomes independent study [...]...Read more $10m Estimate for BEC’S Environmental Costs ‘Conservative’ [...]...Read more Ultrapetrol Bahamas Ltd PT Raised to $4.50 at Jefferies Group (ULTR) [...]..Read more Venezuela’s regional energy program Petrocaribe wobbles [...]...Read more Panama canal expansion to be a “big bonus” for Trinidad & Tobago LNG exports [...]...Read more
Oil and natural gas reported near Puerto Rico [...]...read more
Shale boom lowering T&T’s fuel sales – Petrotrin President [...]...Read more Barbados cannot sustain $800 million fuel import bill, says minister [...]...Read more Planning Minister: Petrocaribe not likely to be sustainable [...]...Read more
Diesel racket smashed [...]...Read more Oil Drops to Lowest Level Since June [...]...Read more BEC Preferred Bidder to Gov’t ‘Within Week’ [...] …Read more
T&TEC praised for providing electricity to 450,000 [...]...Read more Step on the gas in Latam [...]...Read more
Iran nuke deal could push oil prices lower [...]...Read more Argentina offers Repsol US$5-b compensation for YPF [...]...Read more 25 St Elizabeth households get electricity for first time [...]...Read more Puerto Rico seeks to break power company monopoly [...]...Read more Grenada to liberalize its energy generation sector [...] …Read more Government Proposes That All Electricity Vat ‘Exempt’ [...]...Read more
LatAm and Caribbean Oil Companies” Workshop Ends in Bolivia [...]...Read more IDB Approves Loans To Strengthen Suriname’s Electricity Sector [...]...Read more Oil above US$95 on strong gasoline demand [...] …Read more Cuban Electric Industry at FIHAV 2013 [...]...Read more Regional Public Utility Regulators Meet in Belize [...]...Read more Repsol, BHP Billiton to go after 304 million barrels [...]...Read more
Puerto Rico seeks to break power company monopoly [...]...Read more
BHP Billiton signs 5th PSC with Trinidad and Tobago [...]...Read more continued on page 7/
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REGULAR UNLEADED GASOLINE AVERAGE PRICES AT THE PUMP NOVEMBER 2013 Retail prices for Regular Unleaded Gasoline in the thirteen Caribbean countries reviewed at the end of November 2013 showed marginal decreases in prices for seven countries namely; Bahamas, Barbados, Belize, Dominica, Grenada, St.Kitts and Nevis and Suriname between 2% and 5%, the highest of which St.Kitts experienced. Prices in Antigua and Barbuda, BVI, Jamaica, St. Vincent and the Grenadines and Trinidad and Tobago remained stable. However, there was a minimal increase in prices of 1.3% in St. Lucia. The average retail price at the end of November 2013 was 1.7% lower than the previous month.
Regular Unleaded Gasoline: Average Retail Price (US$/Litre) 2013 COUNTRIES JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV AVG
ST. LUCIA
1.23 1.37 1.58 1.43 1.21 1.18 1.29 1.25 1.35 1.26
1.23 1.41 1.58 1.47 1.21 1.20 1.29 1.28 1.33 1.26
1.23 1.34 1.60 1.41 1.28 1.17 1.25 1.16 1.20 1.34
1.23 1.43 1.63 1.50 1.26 1.24 1.31 1.24 1.26 1.30
ST. VINCENT/ GRENADINES
1.22
1.22 1.12 1.15 1.17 1.17 1.17 1.14 1.14 1.14 1.14
1.16
SURINAME [95 OCT]
1.42
1.47 1.54 1.47 1.45 1.46 1.44 1.51 1.46 1.38 1.36
1.45
TRINIDAD/ TOBAGO [92 OCT]
0.42
0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42
0.42
ANTIGUA/ BARBUDA BAHAMAS [91 OCT] BARBADOS BELIZE [87 OCT] B.V.I [87 OCT] DOMINICA GRENADA (95 OCT) JAMAICA ST. KITTS/ NEVIS
1.23 1.52 1.58 1.52 1.30 1.28 1.32 1.26 1.35 1.28
1.23 1.50 1.58 1.54 1.25 1.28 1.35 1.24 1.22 1.30
1.23 1.43 1.71 1.53 1.23 1.28 1.33 1.25 1.17 1.32
1.23 1.43 1.63 1.55 1.29 1.28 1.31 1.25 1.24 1.32
1.23 1.42 1.64 1.53 1.26 1.28 1.32 1.26 1.21 1.31
1.23 1.44 1.64 1.53 1.26 1.28 1.33 1.27 1.20 1.31
1.23 1.44 1.69 1.53 1.28 1.26 1.33 1.21 1.31 1.31
1.23 1.37 1.63 1.46 1.28 1.21 1.30 1.16 1.26 1.33
NOTE: *US Gallon = 3.785 L *Imperial Gallon = 4.546 L *As at November 1, 2009 MTBE was phased out from all gasoline blends in Jamaica and replaced with 10% Ethanol.
SEE RETAIL PRICE CHART on page 6/
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Call: 1-876-927-1779 | Caribbean Petroleum Update : November 2013
Comparative Retail Pump Prices Regular Unleaded Gasoline NOVEMBER Avg vs 11 Mths Avg (Jan - November 2013)
1.80
US$/Litre
1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00
13 Caribbean Countries
See prices for all products at www.cippet.org
Rubis Melville Street Service Station, GRENADA (source: http://thenewtoday.gd/ )
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Petroleum News & Happenings….continued from page 4 T&T’s 2014 gas production to match 2011 [...] …Read more
Gas Exporting Countries’ 15th ministerial meeting starts in Tehran [...]...Read more
Panama Canal’s LNG Surprise to Redefine Trade in Fuel: Freight [...]...Read more
JPS lists $2.5 billion preference shares [...]...Read more Venezuela’s government seizes US-owned oil rigs [...]...Read more
Jamaica signs CCCL export agreement to Venezuela [...]...Read more
About Vehicle Fluids
The fluids in vehicles are toxic to humans and animals, and can pollute waterways if they leak from a vehicle or are disposed of incorrectly. Many vehicle fluids are exposed to heat and oxygen while an engine is running, and undergo chemical changes. These fluids also pick up heavy metals from engine wear and tear, making them even more toxic to the environment. Most vehicles manufactured before 1994 use CFC-12 as a coolant; CFC-12 is no longer produced in the U.S. because of its detrimental effect on the ozone layer. Alternative refrigerants are available, but some still have an impact on the ozone layer if they escape your car’s air-conditioning system.
Source: http://homeguides.sfgate.com/
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Call: 1-876-927-1779 | Caribbean Petroleum Update : November 2013
US$/BBL
Average Weekly & Monthly Crude Oil Prices (Sept November 2013) 110
108.77
105
103.14
100
96.94
95
SEP
90
WK1
WK2
OCT
WK3
WK4
NOV
MTH AVG
Period
Average Monthly World Crude Oil Prices (2010 - 2012)
Analysis of the International Crude Oil prices over the three months period September - November 2013 saw prices in November averaging US$94.78/ BBL. When compared to the average prices seen in September and October this average price was approximately 11% and 6.4% lower respectively. The highest weekly price seen in November for the product was US$96.94/BBL - reflected in week one while the lowest price recorded was US$93.92 seen in week four. An average of the three month’s average prices reflected US$100.88/BBL.
US$/BBL
109.61
106.0
110 100
88.14
90 80 70
2010
2011
2012
60
Jan
Feb Mar Apr May Jun
Jul
Aug Sep Oct Nov Dec
Period
Yr Avg
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