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Bermuda's gasoline and oil prices

About the same as in London, but with more justification in this tiny 21 square mile isolated island

By Keith Archibald Forbes (see About Us) exclusively for Bermuda Online

To refer by e-mail to this file, use "bermuda-online.org/gasolineoil" as your Subject

How Bermuda prices affect US and Canadian visitors

Bermuda prices for unleaded gasoline (petrol to British newcomers) will come as a very considerable shock to our visitors, especially the 85% who come from USA, when compared to gasoline prices in the Caribbean. Here, the price of gasoline is higher than most other places anywhere in the world. Only the far North of Scotland, namely Sutherland, Caithness, Orkney, plus in Europe, Norway and Iceland are they higher. Fluctuations in the US$ rates with UK Sterling and the Euro must also be taken into account.

In Bermuda, costs to motorists and consumers of petrol (gasoline) and oils are on average, three times the prices in USA; nearly three times the prices in Canada; far more than double the cost of anywhere in the Caribbean. 

But when you consider that Bermuda is 

• only 21 square miles (56 kilometers) in total land area, far smaller than anywhere else mentioned above

• not near a mainland but a tiny island 600 miles due east of the nearest mainland, North Carolina, USA

• has a total resident population of under 66,000 and a resident plus tourist population of under 69,000

there is far more justification for higher petrol (gasoline) and oil prices in tiny Bermuda than in Britain, despite the latter being a North Sea oil-producing country of 60 million people. Britain is the only oil-producing country in the world that applies gasoline taxes far more heavily than even the non oil-producing nations.

Comparisons

• In USA see state-by-state prices per gallon at  http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_page.html

• In New York, see New York Gas Prices (note, per gallon (each gallon is 3.785 liters)

• In Toronto, see Toronto Gas Prices (in liters)

• In Europe, see http://www.eia.doe.gov/emeu/international/gas1.html

Bermuda consumes more oil and gas annually than the combined Caribbean islands - more than 800 miles to the south - of Antigua, Dominica, Grenada, St. Lucia and St. Vincent combined, yet pays so much more for them than those islands do in government duty and retail prices. It is one of the reasons why Bermuda is so expensive. Prices of oil, gasoline and related petroleum products are key factors mostly responsible for not only the cost of transport by air and land but also the prices we pay for accommodation, electricity, air conditioning, food, furniture, heat, household goods and more.

Bermuda prices are fixed and heavily taxed and, with all gasoline and oil imported, has very high Bermuda Government Customs Duties of US$ 0.54 per liter. This alone is 44 percent of the price consumers pay at the gasoline service stations, the biggest single reason for - and biggest single beneficiary of - the huge local prices. Government duties mentioned above of 44% plus employment and other taxes and their repercussions amount to about 58% of the total price. Perhaps because Bermuda visitors use mopeds - with gas tanks in liters, not gallons - they don't realize the price differential. Bermuda does not produce any oil or gas, all in imported - and is tiny in land area, only 21 miles in total land area. In contrast, the United Kingdom, which is an oil, petrol and gas producing country and is 58,000 miles in total land area, charges consumers 75% in total taxes. 

More than 21,000 automobiles and 30,000 mopeds, trucks, taxis and buses are on the roads of Bermuda.

The Bermuda Government appoints a Price Control Commission (see Bermuda Government Boards) under the Price Commission Act 1974, to approve prices of petroleum products. It meets on or about the 16th day of each month to determine local prices. It sets the maximum levels that service stations may charge.  

It is wrong to state that because Bermuda is only 21 square miles in total area, less gasoline is used proportionately. Because Bermuda's top legal speed is only 22 miles an hour (33 kilometers per hour), it does not enable motor vehicles to use fuel most efficiently. So the impact of the Bermuda cost is even more noticed, not less. Inefficient use adds to the expense instead of mitigating it.

The only two retailers allowed to offer gasoline and oil in the Bermuda marketplace are USA-owned  ExxonMobil (trading in Bermuda as Esso) and the British-Dutch Shell Oil Company. 

Because of the price the Bermuda Government expects per liter from gasoline service stations, there is no competition between Esso and Shell shown below, the only two gasoline corporations allowed to sell to Bermuda and visiting consumers.

May Bermuda gas (petrol) stations are closed during Bermuda Public Holidays. Visitors on mopeds or scooters should tank up the day before or after. Also, gas (petrol) stations keep different - not standard - hours.  

ExxonMobil group of companies

Based at its Ferry Reach head office, Ferry Reach, St. George's Parish, GE 01. Telephone (441) 294-5220. Fax (441) 294-5243. An Esso oil tanker arrives in Bermuda about once every six weeks to discharge fuel. But instead of being in competition with each other, their prices are the same.  About half the 30 gas stations are owned by Esso. It alone pays the Bermuda Government more than US$ 33 million a year in fuel taxes. 

Esso Bermuda is a division of a Bermudian corporation, Coral Petroleum Company Limited, owned by ExxonMobil. Stretching from the Esso Oil Docks at Ferry Reach in St. George's Parish to the Belco electricity generating plant in the industrial part of Pembroke Parish is the Esso pipeline that feeds Belco with heavy atmospheric gas and heavy oil. It enables Belco to generate 509 million kilowatt hours of electricity annually to businesses, hotels, guest houses, efficiency units and homes.

Esso gasoline stations and marinas

Many outlets island-wide. Always call first to ask for opening hours

Shell Oil Company in Bermuda

Update: French oil company Rubis SA purchased Shell Oil’s operations in Bermuda. It continues to be marketed under the Shell brand. Terms of the purchase were not disclosed. Rubis revealed that Shell, which in Bermuda owns two major fuel depots, one liquefied natural gas terminal and 12 gas stations, has sales of $45 million per year in Bermuda and net income of $3.6 million. The agreements signed with Shell provide for a licence to use the Shell brand in the service stations as well as finished goods supply contracts. Rubis already has an extensive network of energy businesses in the Caribbean and French Guiana. The deal was announced in July 2006 at when Phil Burton, country chairman of Royal Dutch/Shell Companies Bermuda said a final decision was subject to the approval of shareholders and the Bermuda regulatory authorities. Shell has had the Bermuda operation on the market since late 2005. Rubis is one of the largest bulk storage operators in France. Through Rubis Gaz, the company distributes liquefied petroleum gas (LPG) to retailers as well as propane and butane to residential and commercial customers.

History: Based at its Ferry Reach head office, Shell House, Ferry Reach, St. George's Parish, GE 02. Telephone (441) 297-1577. Fax (441) 297-8472. In 1947 - a full three years before appropriate legislation officially launched the industry - Bermuda welcomed an organization known worldwide because of its distinctive trademark of a sea shell. With dramatic implications to fuel and light Bermuda's lawyers for future business of equal caliber, the Provident Fund of the combined petroleum companies known in The Netherlands as Voorzieningsfond Der Verbonden Petroleum Maatschappojen was transferred to Bermuda. It had been granted exemption from payment of United Kingdom Income Tax on its investments when it had to quickly transfer its Headquarters from The Hague to London following the fall of Holland in 1940.

Thus Shell arrived in Bermuda, initially as an investment vehicle to protect the pensions of employees of all companies within the Royal Dutch Shell umbrella from unnecessary taxation by Britain. Lawyers Conyers, Dill & Pearman, with bankers Jack Tucker (later, Sir Henry) of the Bank of Bermuda and Hal Butterfield (later, Sir Harry) of the Bank of N. T. Butterfield & Son, assisted in the transfer of Shell's Provident Fund to Bermuda. Three Shell VIPs, Sir George Legh-Jones, Mr. Tim Wilkinson and Mr. Tim Boyle even bought land in exclusive Tuckers Town. They built very expensive homes there, as a visible sign that Shell was here to stay. Its first staff - a group of 20 mostly young ladies - arrived from England on Shell tankers on September 28, 1947. Most have since graduated to the great clamshell womb of heaven. Its first service station - still there -  was on May 12 1952 at East Broadway in Pembroke Parish. 

Shell was also the first to operate a corporate administrative structure for a collection of affiliated international companies outside the City of Hamilton, at Ferry Reach in St. George's Parish. Now they look after the retirement plan interests of Shell employees worldwide.

About half the 30 gas stations are owned or operated by Shell. It alone pays the Bermuda Government more than US$ 33 million a year in fuel taxes. 

Shell gasoline stations and marinas

Many outlets island-wide. Always call first to ask for opening hours.

Kerosene  

It was the first product brought in by the West Indian Oil Agency (later, Esso) for cooking, lighting and heat. It is still imported, mostly for heating kerosene units in the winter months and as an emergency fuel source during frequent electricity outages. Until the year 2000, this was far less expensive than electricity, although also with a very heavy import duty.

Oil  

Then naphtha, it was first imported into Bermuda by West Indian Oil Agency (later, Esso) in Bermuda in 1908 to coincide with the introduction by the Bermuda Electric Light Power & Traction Company (later, the Bermuda Electric Light Company Limited or Belco) of electricity in Bermuda. When commercial aircraft first flew between Bermuda and the USA in 1937, Esso Bermuda supplied the fuel. (Today, Shell does so at Bermuda International Airport).

Public and private buses and trucks in Bermuda

These days, to have cleaner air and also to save costs, many public and private bus systems, train services and trucking systems in Europe and Hong Kong in particular run on propane gas or fuel cells or electricity. But alas, not in Bermuda. All Bermuda buses and most trucks and other commercial vehicles  run on diesel fuel, also exceedingly expensive. Their exhaust emissions cause considerable pollution.