More transparency on fuel prices in new lease

Monday 15 February 2016

New checks have been introduced to a renewed ten-year lease on Jersey’s fuel farm to ensure that the owners are not taking excessive profits out of the operation.

After long negotiations, ministers have agreed the renewal of the fuel farm lease, but have added in a new ‘operating agreement’ which guarantees the right to arbitration for companies that use the facility over disputes, and which gives competition watchdog CICRA oversight of prices.

Jersey’s fuel farm at La Collette is ultimately owned by Rubis, which is one of several companies that use it to import and store fuel. Their competitors in the retail market have complained that they are paying over the odds to use Rubis’ facility – Rubis themselves apparently assert that the costs are fair.

The company has not responded to requests for comment on the story.

Infrastructure Minister Eddie Noel says that the new agreement adds the transparency and independent oversight to ensure that everything is fair to all companies.

He said that he was not expressing a view on whether the arrangements were fair, but that it was better to leave that question in the hands of CICRA, who are the competition regulators.

The lease is for the 209,350 square feet of land that the fuel farm sits on – Rubis own the actual infrastructure in terms of storage containers and equipment that comprise the fuel farm itself.

Deputy Noel said: “We have completed negotiations on the lease and a new operating agreement.

“CICRA are, if you like, the ‘policeman’ in this, and it is in their remit to ensure a level playing field.

“The operating agreement requires that certain safety work is carried out. We have made it more transparent and put in penalties if that work is not completed.”