Two nights ago were were facing the possibility of either a butane price hike of fourteen dollars per hundred pound cylinder or a strike by butane importers. Tonight, thanks to a sharp piece of negotiation by government - there will be neither a strike nor an across the board price hike.
In a development that is nothing short of remarkable, Belize will now have two kinds of butane to choose from, something like premium and regular gas.
The premium product will be the butane imported from Pemex in Mexico and sold by Belize Gas Limited and Western Gas Company - both companies owned by the Reyes family. Their butane is of a certified higher standard and so their product will be more expensive; instead of selling for the $126.00 that it did in the past, that will now sell for $134.00 and will be considered premium butane.
The other importers, BWEL, Southern Choice Butane or Zeta Gas, and Gas Tomza - who get what government says is a lower grade butane product from Central America will continue to sell for the same maximum price of $126.00 per cylinder in the city. Their product will be considered regular butane.
It's a clever and useful piece of negotiation because in the past, the controlled price for a hundred pound cylinder of butane was arrived at by averaging out the cost from all importers: the PEMEX product was always more expensive so it drove up the average price.
But now that has been unhitched from the price formula and declared to be a premium product, leaving the price of regular butane unchanged.
That's good news for consumers who just two days ago were staring down the barrel of a record high price of $136.00 or $142.00 for butane. And yes, there is a new high price but it is only for premium butane.
Public Service Minister John Saldivar led the negotiation which concluded today in Belmopan and he gave us an outline of the new price structure regime:
Hon. John Saldivar, Minister of Public Service
"So we kind of have the same kind of differentiation that we do with gasoline where you now have premium butane and a regular butane. It keeps the general price of butane where it is now and it allows for consumers that have preference to get it if they are prepared to pay the higher price. We are certainly happy with the outcome Jules and we are glad that all sides have been able to walk away from this feeling satisfied that we have done our best. Through negotiations we have arrive at a position where consumers can benefit. The suppliers can feel comfortable and government has feel good that it has defended the interest of our consumers."
Government hopes to have standards set across the board for various types of butane - or as the case may be, propane by September.
We note that what we refer to as butane is actually liquid petroleum gas, a combination of propane and butane. A 60/40 mix is considered optimal and that is what the premium butane is certified to be. However, tests we have conducted show that some importers have sold us 100% propane - which does not burn as hot and burns out quickly - it is also much cheaper for importers.
But all those formulas aside - what most consumers care about are those scales. The law went into effect on Wednesday and tonight we can confirm that there is some compliance, but there is widespread non-compliance - and those who aren't playing by the rules are being prosecuted.
That processes starts with summonses being issued from the bureau of standards - and there are about forty of those being prepared right now.
The first will go out to those butane suppliers who completely ignored the new regulations and did not even apply to for a scale to be tested.
And then there is the second group - those who are not fully compliant. There's 37 principals and agents in that group - and, yes, included in there are major importers.
Those who fail to comply with the requirement of tested scales on trucks and at the depot will receive summonses and be taken to magistrate's court where, if convicted, they will face a maximum fine of five thousand dollars or imprisonment or both.
We note that some of those 37 companies are on their way to being compliant - and may be so by the time the summons reaches them.
So, who is complying? As of yesterday, only six businesses are complying with the scale requirement.
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