December 2015 by Caribbean Energy Information System

CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : DECEMBER 2015

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CARIBBEAN Petroleum Update A Publication of the Caribbean Energy Information System (CEIS)

December 2015 ISSUE

FUEL QUALITY

The Impact of tainted fuels on vehicles The transition from an Industrial era to an advanced Technological era has resulted in changes in the way we traffic our people, goods and services to meet the changing demands of the global world. With increases in the number of vehicles imported, the demand for fuel such as gasoline and diesel has also increased. The increase in transportation energy use in the Caribbean over the years is largely attributable to the influx of used cars that in recent times are being imported and the increase in shipment of goods coming through the ports and by air due

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to increased trading. Quality is important in every aspect of our lives, whether we are in the business of production or providing a service. Like food quality, fuel quality is not only critical in the fight against climate change (by reducing emissions) but is also important in the proper functioning of vehicles. In this issue of the Petroleum Update we will look at what constitutes “bad” gas and the effect it can have on motor vehicles. Bad gas comes in many different varieties. The two types of bad gas you should be most continued on page 2/

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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : DECEMBER 2015

Fuel Standards: The Impac t of tainted fuels on vehicles concerned about are: (a) Gasoline that does not contain adequate amounts of dispersant-detergent additives to keep fuel injectors, intake valves and combustion chambers clean and (b) Gasoline that does not contain the advertised octane rating or does not have adequate octane to prevent engine damaging detonation. The main issue with gasoline that fails to keep the fuel system clean is quality (or the lack thereof). To increase the competitive margin (or profit margin) some gasoline suppliers may choose to reduce or even eliminate the amount of dispersant-detergent additives in their fuel or, choose to use a less-effective product or one that causes other kinds of problems. When people use gasoline that does not keep their fuel system clean, their injectors gradually clog up with varnish deposits. Some injectors are more vulnerable to clogging than others. It is not something most motorists notice right away because it takes time for the deposits to accumulate. But with every drive cycle, the accumulation of deposits gradually restricts the injectors thereby causing a reduction in fuel delivery. Deposit control additives can also disrupt the normal injector spray pattern, which interferes with fuel atomization and mixing. These results in a lean fuel mixture that may cause the engine to misfire, idle poorly, and hesitate or even stall when accelerating. It does not take much of a restriction in an injector to lean out the fuel mixture. Only an 8-10% restriction in a single fuel injector can be enough to cause a misfire.

continued from page 1/ the British Virgin Islands use 87 octane while in Jamaica regular 87 octane gasoline has a 10% blend of ethanol (a 10% ethanol blend typically adds a couple of points to the base octane rating). In addition, Grenada and Suriname use 95 Octane while Trinidad and Tobago’s regular gasoline has 92 octane rating. Countries in the Caribbean also use premium gasoline but with different octane levels as well. Belize, Trinidad and Tobago and Suriname all use 95 octane premium gasoline; however Suriname adds an additive while in Jamaica premium gasoline has a 90 octane rating with a 10% Ethanol blend. The ratio of vehicles that use premium gasoline in the Caribbean compared to regular gasoline is low and of course the price of premium gasoline is higher. Premium fuel is normally used in mostly high-performance turbocharged or supercharged engines. The average vehicle should not need the extra octane unless it has a problem or a lot of miles and a heavy buildup of deposits in the combustion chambers. Of course, another valid reason for buying premium is to get a higher level of fuel-cleaning additives, which some grades of premium do contain. That is a purchasing decision the motorist has to make. Of note, as the octane rating goes up, so does the price and stations may tamper with pumps to change the mixture ratio for a more profitable blend. However, the most common “tainting” is to dilute the higher octane fuels with lower one (for example mixing premium with regular).

The octane rating of the fuel depends on what is in it. Years ago, tetraethyl lead was used to boost the octane rating of gasoline. But lead is a heavy metal that is toxic to people and the environment. Lead also contaminates catalytic converters and oxygen sensors so it cannot be used in modern engines. Now they use methyl tertiary butyl ether (MTBE), which is made from natural gas, and ethyl tertiary butyl ether (ETBE), which is made from corn and natural gas. The higher the level of these additives, the higher the octane rating of the fuel. In 2009, MTBE was phased out of all gasoline blends in Jamaica and replaced with 10% Ethanol. These measures were more focused on increasing sales of locally refined Another form of “bad gas” has to do octane levels and petroleum products and improving Jamaica’s carbon specifically with low octane fuels. In the Caribbean footprint through substitution of more environmentally there are different grades of gasoline used. For example friendly blends. in the Bahamas regular gasoline is 91 Octane, Belize and It is interesting to know the amount of additive required for providing an adequate level of protection for motor vehicles. Industry sources say the recommended level is about 1,000 parts per million (ppm) of dispersant-detergent in the fuel (which in most cases is not an exorbitant costs to gasoline suppliers), however tainted gasoline contains less than the recommended dosage, as low as 100 ppm of additive. Consequently, bad gas may prove beneficial to businesses that engage in repairing motor vehicles, but no one else, not the motorists, government or even the marketing companies for that matter.

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Another cause of bad gasoline is due to contamination. This is simply just gasoline that has been contaminated with dirt, water or other liquids. Many filling station pumps have a filter that keeps dirt and corrosion that may have settled in underground tanks from getting into their customerâ&#x20AC;&#x2122;s fuel tanks - assuming they maintain the filters properly. But these filters will not remove water. Alcohol attracts water, and if there is enough water present it can make the alcohol separate from gasoline. Whilst not often observed, fuel can also be cross-contaminated in pipelines, in storage facilities and distribution centers, and even in transit by moisture and other petroleum distillates such as diesel fuel, kerosene (jet fuel) and other chemicals. While the quality of gasoline imported and distributed weighs heavily on the marketing companies, one must also recognize that the most common cause of dirty gas, though, is the vehicles own fuel tank. As the miles accumulate, the protective plating inside the tank can wear away allowing corrosion to occur. The small flakes of rust are then pulled into the fuel pickup strainer where they can clog the strainer, damage the fuel pump or plug the gas filter. In light of the concerns raised in Jamaica about substandard gasoline at some fuels stations, it is important that other countries in the Caribbean pay greater attention to their fuel quality and put the necessary measure in place to ensure the standards and quality of the fuels

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are met to avoid such situations. It is therefore imperative that going forward the necessary measures are implemented to prevent future occurrence of the bad gas situation in Jamaica and other Caribbean countries. In addition, where industry standards are concerned, it is crucial for checks and balances to be implemented on a regular basis. Where octane levels are concerned, gasoline retailers and distributors should ensure that filling station pumps are accurately calibrated. As such the regulators should ensure proper fuel quality through frequent policing to make sure it meets the rated octane. Similarly, underground storage tanks should meet stringent standard requirements to prevent fuel leakage and soil contamination. Regular inspections are a must to ensure their integrity. Where misfiring in vehicles as well as sputtering and stalling are observed, in some cases the gas maybe contaminated with water. Draining the tank and refilling it with fresh gas can solve the problem. Additionally, a less than normal fuel condition combined with lower-than-normal fuel flow and/ or pressure is usually a good indication that the fuel system has a restriction. If the problem is not a weak fuel pump, check the filter, inspect the gas tank and clean it or replace it as needed if the tank is full of dirt or corrosion. Finally, if a vehicle cranks and has spark but refuses to start, check the fuel gauge. No gas is worse than bad gas.

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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : DECEMBER 2015

PETROLEUM NEWS & HAPPENINGS Return to an oil price of $80/barrel by 2020, forecast by IEA[...]...Read more If PetroCaribe Dries Up, So Will Our Economy [...]... Read more U.S. Warns That If Venezuela Ends Oil Subsidy For Caribbean, It Can’t Step In [...]...Read more What Oil’s Plunge Means For Gasoline Prices [...]... Read more

Caribbean Energy Gas Prices Up $0.32, Diesel Up $0.17 [...]...Read more

OCEANA Commends Government of Belize for Offshore Oil Exploration Policy[...]...Read more Gas Prices Up $0.07, Diesel Down $0.86 [...]... Read more Last two offshore oil contracts expire, as Belize looks to onshore oil [...]...Read more Jamaica testing gasoline sold at retail outlets [...]... Read more Bahamas Petroleum announces passing of the Petroleum Bill, associated Regulations and the Sovereign Wealth Fund Bill in Bahamian House of Assembly [...]...Read more Trinidad and Tobago among oil producing countries affected by drop in oil prices[...]...Read more US Unable to Supply Caribbean if PetroCaribe Ends, Admits Success of Venezuelan Program [...]...Read more Gas prices down $2.22, diesel down $1.69[...]...Read more U.S. Warns That If Venezuela Ends Oil Subsidy For Caribbean, It Can’t Step In [...]...Read more Tullow Oil set to get exploration license in Guyana [...]...Read more Petroleum exports will continue to decline, Government says [...]...Read more

CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : DECEMBER 2015

Prices at the Pump

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DECEMBER 2015

Retail prices for Regular Unleaded Gasoline in the thirteen Caribbean countries reviewed at the end of December 2015 showed overall decreases in prices for four countries; Barbados, Dominica, Grenada, Guyana ranging between 2.2% and 2.5%. Jamaica recorded an increase of 5.8% in prices while prices in the remaining nine countries were stable. The average retail price was 0.31% lower when compared to the previous month. The average retail price at the end of December 2015 for the product over the thirteen countries when compared to the average retail price seen in January 2015 showed and overall 5% decrease. In addition, when the average price in January 2015 is compared to the average retail price in December 2015, eight countries saw decreases in prices. St.Lucia was observed to have the highest decrease in prices in December 2015 of 26%.

Unleaded Gasoline: Regular : Average Retail Price – January - December 2015 (US$/ Litre) COUNTRIES

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

AVG

ANTIGUA/ BARBUDA

1.11

BARBADOS

1.53

1.42

1.43

1.51

1.55

1.60

1.64

1.62

1.55

1.45

1.41

1.53

BELIZE [87 OCT]

1.12

1.06

1.15

1.20

1.18

B.V.I [87 OCT]

1.21

DOMINICA

0.92

0.85

0.83

0.98

1.51

1.60

1.59

1.49

0.92

0.83

0.82

1.11

GRENADA (95 OCT)

0.97

0.90

0.95

1.03

1.10

1.14

1.15

1.12

1.10

1.08

1.07

GUYANA

1.06

0.83

0.93

0.97

0.93

0.87

0.84

1.00

0.97

0.95

0.93

JAMAICA 87 Octane[E10]

0.96

0.99

1.06

1.12

1.15

1.16

1.15

1.09

0.98

0.95

0.89

0.94

1.04

MONTSERRAT

1.04

0.95

0.96

ST. KITTS/ NEVIS

0.96

0.94

ST. LUCIA

1.21

1.04

0.98

1.03

1.05

1.07

1.10

1.06

0.91

0.89

1.03

ST. VINCENT/ GRENADINES

1.03

0.93

0.85

1.01

1.03

0.91

0.94

TRINIDAD/ TOBAGO [92 OCT]

0.42

AVERAGE RETAIL PRICES

1.04

0.98

0.99

1.02

1.03

1.08

1.10

1.08

1.02

0.99

1.04

Comparative Retail Pump Prices Regular Unleaded Gasoline January and December vs. 12Mths Avg

NOTE: *US Gallon = 3.785 L *Imperial Gallon = 4.546 L

1.80 1.60

JAN

1.40

DEC

US$/Litre

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

12 Mths AVG

*As at November 1, 2009 MTBE was phased out from all gasoline blends in Jamaica and replaced with 10% Ethanol.

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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : DECEMBER 2015

International OIL PRICES

CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : DECEMBER 2015

FEATURED OFFERS: P E TS TATS - t h e Ca r i b b e a n E n e rg y I n fo r m at i o n System (CEIS) primary report of historical annual petroleum energy statistics provided for 18 Caribbean Countries. Included are data on total energy production, consumption, and trade; overviews of petroleum, natural gas, electricity, as well as financial and environmental indicators for over twenty years.

US$/Bbl

48.36 45.98

40.00 30.00

40.40

20.00 10.00 0.00 Period

Oct-15 WK1

WK2

Nov-15

WK3

Dec-15

WK4

MTH AVG

Average Monthly Crude Oil Prices 2013-2015 120.00

106.61

105.78

100.00

US$/Bbl

Analysis of International Crude Oil Prices for the October to December 2015 period showed an average price of US$37.41/bbl . This average price was 19.3% lower than the average price reported in October 2015 and 11.9% lower than the price in November 2015. The highest weekly price seen in December 2015 for the commodity was US$40.40/bbl-reflected in week one while week three accounted for the lowest price of US$35.78/bbl. Average crude oil price at the end of December 2015 when compared to the average price seen in January 2015 showed and overall decrease of 24%. Also, when the average price per barrel in December 2015 is compared to the average price in December 2014, a 38% decrease in prices was recorded. The price of crude oil for the 2015 period is the lowest it has been since 2009.Global oil production is running close to record highs and, with more barrels poised to enter the market from nations such as Iran and Libya, who knows how far oil prices can plummet further...

Average Weekly and Monthly Crude Oil Prices (October - December 2015)

60.00 50.00

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80.00 60.00

59.91

40.00 20.00

2013

2014

2015

0.00

Period

Scientific Research Council, Hope Gardens, Kingston 6, Jamaica 1-876-927-1779 (Telephone) 1-876-977-1840 (Fax)

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