KING TAKES AIM AT GENERAL ELECTIONS BUT WHAT WILL A GALLON OF GAS COST ON MONDAY?

In the midst of all the widespread and unsolved crises gripping St. Lucia, King feigns a stupid bravado about the next general elections. Unemployment is at all-time high, gas prices are strangling us and even when there is an apparent lull in homicides, other crimes keep on mounting.

Under King's government, the country is running scared about its prospects for economic growth and development. It may hold the unenviable record of being the only Government with no "track record of achievement" - just bravado.

New gas prices are expected to be announced on Monday and we are holding our breath. Will the government provide us some relief at the pumps? All the data on the movement of crude oil prices suggest we are entitled to relief. But what will King do? Will he put the people first? 

Let us examine what is happening internationally on the oil market. Table 1 below shows the movement of world oil prices for the period April 22 to May 27. It reveals a drop of $10 or 9% for that peiod. Based on that data, shouldn't we expect a corresponding reduction of about $1.50 per gallon at the pumps when King makes his announcement on Monday? That is, shouldn't we expect the price of gas to drop from $15.38 to less than $14.00 per gallon? Well, that's my expectation.

TABLE 1: Movement of world crude oil prices from April 22 – May 27, 2011

	APRIL  22	APRIL  29	MAY  06	MAY  13	MAY  20	MAY  27	DROP
WORLD	118.38	120.84	117.12	110.15	108.32	108.4	10
USA	114.14	116.53	113.76	106.87	103.36	103.1	10

Table 2 compares the movement of US crude oil price with the US average price per gallon. It reveals that while there was a "spike" in early May, there generally a  drop for the rest of the month. 

Table 2:

From Table 2, we can clearly see that as the price of crude oil drops on the world market, so does the average price at the pumps.Simple logic! But will this logic apply to St. Lucia?

We look forward to the benefits of the drop at our pumps next Monday, June 6.

                                                

 Having made the points above, we must also warn that we are not quite out of the shade yet, because there are major uncertainties that could push oil prices above or below what it is now. Economic forecasters are still worried about the following:

(a)  " the continued unrest in producing countries and its potential impact on supply;

(b)  decisions by key OPEC-member countries regarding their production in response to the global increase in oil demand;

(c)   the rate of economic growth, both domestically and globally;

(d)   fiscal issues facing national and sub-national governments;and

(e)  China's efforts to address concerns regarding its growth and inflation rates.”

These are the circumstances that have challenged and rendered the King government incompetent. Yet, these "fellahs" can muster the audacity to put themselves up for re-election. What a shame?