In large parts of the world high oil (gasoline) and food prices is affecting many people. In Aruba it is no different. If you put into perspective that this island’s gasoline prices have gone up with 21% since January to a whopping $1,47 (€0,95) per liter or $5.55 per gallon, you can imagine how things can get.
Needless to say that high gasoline prices are becoming a burden for many budgets. Not only individuals but also businesses are feeling the pinch. Yet life continues here on the island.
Still, the new reality asks for change in mind set, especially when you take into consideration that Aruba relies heavily on fossil fuel for its daily life. There is one water/power distribution company, where the machinery uses gas oil (diesel). Every time the oil prices rise, water and power bills rise equally.
In subsequent chain reaction, imports, transport, insurance and all other costs and products rise as well. Capitalism doesn’t allow these costs to be carried by either the government or businesses, where naturally (understandably) the extra costs are passed on to the consumers through the prices. The result is an imminent and highly dangerous wage-price spiral on Aruba.
In other countries there might be alternative methods to generate power such as nuclear, gas, solar, wind etc., but not in Aruba. At least not in the short term just yet. Solar and wind power surely sounds appealing for Aruba, as there is an abundance in both. However, local officials and experts believe wind and solar energy are still not feasible. By the way, I use the term ‘expert’ loosely.
The latest news about a solution for the dependency of gas oil in Aruba, as far as the water and power generation is concerned, the suggestion has been made by this island’s prime minister to switch from gas oil to natural gas. He traveled recently to Colombia and made some contacts where he talked about a theoretically supply of natural gas. Current equipment needs to be transformed to handle natural gas. The prime minister went on to claim that this could bring a reduction of 40% in cost.
I don’t necessarily rule out that possibility (at this point any suggestion is welcome), only it’s seems to me that we would exchange one fossil product for another. Plus, relying on one country for supply doesn’t seem the smartest thing to do. At the end I don’t think this idea is going to materialize.
Meanwhile another issue that is becoming worrisome is the hike in food prices. Aruba has a very good system of food importation. There are several import wholesalers that distribute any kind of North American, South American and European food products you can imagine. Grocery stores are very well stocked.
Sometimes visitors walk up to me and ask me about the prices in Aruba and the cost of living in general. Visitors think it seems to be on the high end. Indeed it is on the higher end. However, don’t confuse the prices tourist pay in the hotels, where it could be extremely high. For example a bottle of beer that costs $6 at the pool bar, might cost around $2 at the grocery stores. Obviously $2 is still much for a beer, but it surely beats $6.
Above example is an illustration on the difference in prices that range from food to other goods found in gift shops or clothing stores between the hotels and elsewhere.
In the context of this post I use the term ‘Aruba beaches’ as a metaphor for Aruba tourism in general. So, are Aruba beaches becoming too expensive?
The prices across the board has risen, however, there still seems to be enough offers to stimulate visitors to come to Aruba. The recently sharply increased air fares are offset somewhat by the reduction in hotel prices via discount and other incentives. This is the time of year where many discount are to be found.
Concluding, I believe that the high oil (and food) prices might hit your traveling budget, however, there still enough incentives to lower the costs. You just need to be alert for deals. For the locals, we’ll need to cope with the changes, perhaps it is time to adjust our lifestyles somewhat and accept the new reality.