Gas strike was only hot air; butane producers reach an agreement

Cooler heads prevailed today and a scheduled shutdown of butane depots did not take place after all. Instead four major importers, Grupo Tomza, Z Gas, Western Gas Company and Belize Gas Company met with the Belize Natural Energy and government representatives.  This follows a meeting in Cabinet on Tuesday where it was agreed that the way forward was to allow butane to be sold at different prices for different grades. News Five’s Marion Ali found out that the new measure will come into effect shortly.

Marion Ali, Reporting

There was a breakthrough today among butane importers, the local producer, Belize Natural Energy, and government representatives.  And if you were wondering just how this will affect you, well butane will soon be available for sale at different prices per cylinder, depending on the quality you choose to buy.

Jose Trejo

Jose Trejo, Dir., Bureau of Standards

“You’ll have a B.N.E.  price, wherever it is sold, would be reflected throughout all the municipalities. We also will have a mixture, a blended price whereby any company who purchases from B.N.E. and imports, they will have to reflect in their price the amount that they are purchasing from B.N.E. That in itself will help to lower the prices as we speak. There is also going to be a price specifically for those companies importing from Pemex. As well as we have companies that are also importing from Central America, they will have a specific price as well.   So you’ll have the B.N.E. price, the blended price, the Mexican or imported price and you’ll have the Central American price.”

The main importer, Belize Western Energy Limited, was not present at a joint press conference called by the importers of butane. But BWEL issued its own release on Tuesday to say that it would not take part in a planned shut-down today.  That company came under heavy criticism by its fellow importers.

Israel Manzanilla

Israel Manzanilla, Mgr., Western Gas

“We are all aware that one importer has been buying cheap gas at a very low acquisition cost here in Belize and they have been selling it at the regulated price which in they have been making some very good profit margin off the back of the consumers. We can give you our full assurance that, the four major importers present today, we have been importing gas and we have not been mixing our product. We have been selling the imported gas only.”

Mike Reyes, Owner, Western Gas

Mike Reyes

“Our main concern is safety first. I mean you’ve heard a lot of horror stories. That’s why we came to the government and we presented to them and said we won’t continue doing business if this is the way it’s going to be.”

The importers also say that the butane produced by Belize natural Energy has contaminants that can also pose danger.  But B.N.E.’s Marketing Manager, Daniel Gutierrez, who attended the meeting, flatly denied that allegation.

Daniel Gutierrez, Marketing Mgr., B.N.E.

Daniel Gutierrez

“What we want to do is be able to take LPG butane down to the Belizean public at a more affordable rate and whatever structure the government puts in place, we have always said we are willing to work with G.O.B. so that it is a smooth transition into that, but essential what we want to do is make the Belizean people have access to a lower product. We cannot guarantee the whole market, we only have thirty percent.   B.N.E. will still be able to sell to the Belizean people a product that is high quality product at a more affordable price.”

That more affordable B.N.E. price is around eighty-three dollars for a hundred pound cylinder, compared to the importers’ controlled price, which ranges from one hundred and twenty-six to one hundred thirty-one dollars.  While some of the importers were critical of the competition, there is nothing in place to hold any of them to a set standard.  But that is about to change.

Jose Trejo

“We plan to get an expert here by mid-February, end of February to come and assess the LPG market looking at the entire supply and distribution chain—the equipment that they use, the mini-depots, the mini-plants, the cylinders and more importantly the mixtures cause that again is the most important thing. We want to ensure that we move towards quality. Hopefully when we get there we’ll be able to replace the price mechanism that we have agreed to right now with one specifically based on quality.   If you claim that your product is better than the B.N.E. product, then let market forces prevail. You can promote and market as much as you can and prove to the Belizean public that what you have is good and if what B.N.E. produces is not good, that is up to the consumer at the end of the day.”

Marion Ali for News Five.

Gutierrez told us that if B.N.E. discovers and produces more petroleum, it will be able to provide more than the thirty percent it currently can supply. We’ll have a reaction on the allegations against BWEL in Thursday’s newscast.