ST. CROIX — While gas prices across the U.S. mainland have fallen to their lowest levels since before the COVID-19 pandemic hit in 2020, motorists in the Virgin Islands continue to pay significantly more at the pump as local prices have not followed national trends.
Nationally, the average price of regular gas has dropped below $3 per gallon, averaging $2.875 per gallon, according to the U.S. Energy Information Administration.
The drop in national gas prices is attributed to growing supply conditions and less pressure from global demand, creating an oversupply environment that is helping push down gas prices, according to data published on January 22 by ING Group, a multinational banking and financial services company that publishes forecasts on energy markets.
In the Virgin Islands, however, prices remain well above the national average.
According to the Department of Licensing and Consumer Affairs’ most recent fuel report, the average retail price of regular gas per gallon during the week of January 19 stood at $3.744 on St. Croix, $4.783 on St. Thomas, and $4.504 on St. John. The lowest prices were $3.649 on St. Croix, $4.699 on St. Thomas, and $4.259 on St. John. Sol Petroleum’s wholesale rack rate available on St. Croix was $2.31.
While St. Croix gas stations generally purchase their gas from Sol Petroleum, St. Thomas and St. John gas stations generally purchase their gas from various wholesalers out of Puerto Rico.
In comparison, the average retail price of regular gas per gallon on Puerto Rico was $3.43, according to the most recent update for the week of January 26 provided by the Puerto Rico Department of Consumer Affairs. The average wholesale price was $2.70.
Licensing and Consumer Affairs Commissioner H. Nathalie Hodge said the territory’s gas prices are market driven when asked why local prices have not mirrored stateside declines.
“DLCA’s authority is limited to ensuring transparency and the fair markup practices whenever it’s applicable,” she said. “We also do enforcements against price gouging, whenever there is a state of emergency declaration, and deceptive trade practices.”
Since DLCA does not have an economist on staff to analyze fuel pricing, Hodge said the department has contracted with Analysis Group, an independent consulting firm, to conduct a year-long study in partnership with DLCA and the Bureau of Economic Research to explain the price gap.
“Retail pricing practices provide objective data,” Hodge said. “So, from our standpoint, I cannot really say until I receive that report from the Analysis Group.”
The study began last October and is scheduled to conclude in December. Hodge said DLCA meets monthly with the consultants to review progress and provide data but emphasized that conclusions cannot be drawn until the analysis is complete.
“We here at DLCA have observed some of the gas stations, especially on St. Croix, reducing the prices, but it’s minimal,” Hodge said. “It’s not a marginal savings. And until we complete the study, I honestly cannot speak on this. I don’t have sufficient information to do so.”
Historically, Hodge said factors contributing to higher gas prices in the territory have included transportation and terminal fees combined with storage and distribution expenses.
Lutfi Hasan, owner of Gas For Less Service Station & Mini Mart, which maintains gas prices among the lowest on St. Croix, said he keeps his prices down to serve the community. He said, however, shipping and transportation costs prevent him from dropping prices as low as they are on the U.S. mainland. He said he either purchases his gas on St. Croix at the wholesale rack rates provided by Sol Petroleum or from Puerto Rico.
“When I get it cheaper from Puerto Rico, I drop my price,” Hasan said.
As DLCA awaits findings on why gas prices remain higher locally than on the U.S. mainland, Hodge said the study will also examine broader cost drivers affecting prices for food and building materials in the territory.
“I think it will be beneficial because it’s giving us a fair-market perspective,” she said, adding that the study will provide transparency for consumers and give DLCA a better idea if the retail price of goods is warranted.
