It is clear from the findings of various assessment reports, that the Guyana Energy Agency (GEA) has performed exceedingly well for the year 2015.
Reports indicate that the Division facilitated the importation of 121 shipments of petroleum-based products on Guyana’s behalf, which signifies an increase from 118 shipments in the previous year.
Twenty-seven shipments were lifted from oil company, Petróleos de Venezuela, S.A (PDVSA) under the Petrocaribe Agreement while 94 were lifted from Petrotrin, Trinidad. It was observed that the distribution of volumes of similar products (Mogas, Gasoil, Avjet/Kero and Fuel oil) from PDVSA and Petrotrin was skewed towards Petrotrin in 2015 when compared to the previous year.
This was as a result of Guyana being unable to procure any shipments from Petróleos de Venezuela, S.A., Venezuela after July 4, 2015.
Additionally, there was a great degree of uncertainty about obtaining any further shipments for the latter half of the year from the Venezuelan market and the oil companies instead opted to secure products from Petrotrin, Trinidad and Tobago.
To date, no official explanation as to the reason for perceived halt in supplies has been provided and it is believed that the situation may be as a result of the present strained relations between Guyana and Venezuela.
Under the Petrocaribe Agreement, 834,056 barrels were imported during 2015, representing a 52.34% decrease when compared to volumes in 2014. The decrease in volumes imported from Venezuela in 2015 was also accompanied by decreases in total shipment FOB value and long-term financing portion under the Petrocaribe Agreement which fell by 68.17% and 76.81% respectively. The decline in FOB value and long-term financing under the Agreement is primarily due to falling oil prices on the international market.
Since the latter half of 2014, oil prices have considerably declined due to contraction in demand along with record growth in non-OPEC supply. The total petroleum imports recorded an overall increase of 1.27% with a total of 5,001,497 barrels of petroleum-based products imported and an average of approximately 13,703 barrels per day.
There were increases in the imports of Mogas (gasoline), Avjet (Jet Fuel) and Fuel oil while imports for Gasoil (diesel), Kerosene, LPG (cooking gas) and Avgas (aviation gas) decreased during January to December 2015.
Also, imports for oil companies recorded a slight decrease of 0.73% during January to December 2015. There were increases in the imports of Mogas (gasoline), Avjet (Jet Fuel) Fuel oil while imports for Gasoil (diesel), Kerosene, LPG (cooking gas) and Avgas (aviation gas) decreased during this period.
Consumption of petroleum products was calculated based on opening stock, closing stock and import volumes for the year (Consumption = Opening stock + Import volumes – Closing Stock).
A total of 4,955,013 barrels of petroleum-based products was consumed in 2015 with an average of 13,575 barrels per day. This represents a 0.02% increase when compared to 2014.
There were increases in the consumption of all products with the exception of Diesel (Gasoil) and Aviation Gasoline (Avgas). The increase in gasoline consumption for 2015 can be attributed to an increase in motor vehicle registration while the increases in LPG and Kerosene consumption suggests more use of cooking gas and kerosene.
The increase in Fuel oil consumption was predgominantly as a result of increased demand by GPL, in keeping with their transition away from diesel based power generation and toward fuel oil. Also, the increase in jet fuel consumption may be indicative of increased flight travel at international airline carriers.
There was a decline in diesel consumption with decreases from the oil companies and large duty-free consumers. The decrease in diesel volumes can be attributed to a contraction in the bauxite mining and forestry sectors. Avgas consumption have also reduced; particularly, at the market level. For 2015, Gasoil was the most imported product representing 40% of total imports and a CIF value amounting to 42% of total acquisition expense .
Fuel oil and Mogas followed Gasoil reflecting 27% and 25% of total imports respectively with corresponding CIF values amounting to 20% and 29% of total acquisition costs, respectively. The remaining products (Kerosene, Avjet, LPG and Avgas) constituted no more than 8% of total imports and 9% of total acquisition costs.
The average cost per barrel of petroleum-based imports decreased from US$113.72 in 2014 to US$71.02 in 2015, a decrease of 37.55%. This downward trend also continued for the average unit CIF value for each petroleum product. There were decreases of 32.85%, 37.91% and 38.95% in the average unit CIF value (US$/bbl) for Mogas (gasoline), Gasoil (diesel) and Jet fuel/Kerosene respectively.
In addition, the average unit CIF value for Fuel oil, Aviation Gasoline (avgas) and LPG (cooking gas) also decreased by 42.08%, 22.31% and 34.13%, respectively. Retail prices for Mogas (gasoline), Gasoil (diesel) and Kerosene decreased during 2015 by an average of 20.01%.
Specifically, average retail price for gasoline and diesel decreased by 12.49% and 19.78%, respectively. Also, the average retail price for domestic kerosene declined by 28.67% while the average retail price for cooking gas (LPG) decreased by 6.27%.
There were reductions in prices at Guyoil’s gas stations during January, August and October, 2015 and the private oil companies later followed suit. Although there was a peak in prices in the month of June, there was a relatively steady decline in prices for the remainder of the year.
The decline in global oil prices did directly transfer in the local market to some extent; although this could be attributed considerably to the decisions taken to reduce prices at the Guyoil’s stations.
It should be noted that on January 20, 2015, the excise tax was increased from 40% to 50% for Mogas and from 35% to 45% for Gasoil with the rate levied on Gasoil subsequently rising to 50% on October 2, 2015.
Prior to these increases and the fall in international oil prices, the excise tax had remained constant 20% and 15% for Mogas and Gasoil respectively between December 11, 2012 and November 4, 2014.