From time to time I have reported on the gasoline prices in Aruba. It’s been a while and I figured it’s time for an update. Let’s share some context first.
How does gasoline prices affect tourism
If you are traveling to Aruba the gasoline prices may be of interest. Especially considering that this island relies nearly completely on imported goods. Everything is shipped on something which has a combustion engine.
You will directly feel the impact of the gasoline prices if you participate directly in our motor vehicle traffic by way of renting a vehicle.
Indirectly this also can impact you by food prices affect your food prices in the restaurants and the grocery stores.
Lastly, it may have an impact on other products or services you consume while in Aruba. Think of souvenirs and excursions.
How Aruba Gasoline Prices Established
How are the gasoline prices established in Aruba? This is strictly an affair of the stakeholders, sans the consumer.
Every so often when gasoline prices soar beyond a certain point, locals start to murmur. As soon as locals start to complain about the prices, inevitably officials come out with a statement.
They explain the way the prices are established and defend the choice of using this particular system.
The entity to establish and publish the gasoline prices in Aruba is the Ministry of Economic Affairs. Economic Affairs publish the gasoline prices every second Wednesday of each month.
The price is calculated based on the previous month’s crude oil average, expected changes in the coming months, shipping prices, insurance, profit margins, evaporation among the most important metrics.
Why controlled prices
Currently, there are three derivatives of this commodity under official price control: gasoline, gas oil (diesel), and kerosene.
For most people, this seems strange, when the government controls certain aspects of what is supposed to be the free market.
Crude oil products are shipped on a single vessel for all privately owned gasoline stations. It is too tempting for the private distribution chain to set prices as they see fit and go unchecked. This oligopoly is deemed too risky by the island government, for which they choose for regulation.
In 2016, when a new deal was made with now-defunct Citgo Aruba Refinery, the island government acquired the rights to become the sole distribution company of fuel in Aruba. The island government founded in October 2016 a private legal commercial entity to manage the new company.
Strangely now the government of Aruba has both the roles of a full-fletched commercial monopoly partner in the distribution chain while being the sole regulating controlling entity.
2020 Gasoline In Numbers
Below you can see how the gasoline prices did for 2020. For comparison, I have added a few countries and cities with their most inexpensive gasoline prices I could find.
Unleaded Fuel Prices in Aruba in 2020
|Effective Date||US$ Price per US Gallon||% Change Month-over-Month|
|January 8, 2020||$4.43||–|
|February 12, 2020||$4.37||-1.3%|
|March 11, 2020||$4.27||-2.3%|
|April 8, 2020||$3.47||-18.6%|
|May 13, 2020||$3.13||-9.9%|
|June 10, 2020||$3.47||+10.9%|
|July 14, 2020||$3.78||+9.0%|
|August 12, 2020||$3.85||+1.8%|
|September 9, 2020||$3.90||+1.2%|
|October 14, 2020||$3.87||-0.7%|
|November 11, 2020||$3.82||-1.2%|
|December 9, 2020||$3.82||-0.1%|
The 2020 year-to-date change is $4.43 in January to $3.82 which is a drop of 13.6%.
December 2020 Comparison
Following a table with cities and countries, this way we can measure how Aruba fairs worldwide.
Comparison of Unleaded Average Fuel Prices December 2020 Per US Gallon
|Hong Kong, China||$8.64|
|San Fransico, CA||$3.20|
|Los Angeles, CA||$2.94|
|New York, NY||$2.14|
Hong Kong is included in the list as it seems to have the most expensive gasoline prices in the world. Aruba is a Netherlands territory, therefore the inclusion. The three major European economies are also included for comparison.
Aruba has a direct air connection with the US cities mentioned in the list, except for Los Angeles and San Francisco.
Neighboring and fellow Dutch island Curaçao has a similar gasoline price. Neighboring Colombia is at $2.38 per gallon in the nation’s capital Bogotá, which is much cheaper than Aruba.
Aruba’s closest neighbor of all is Venezuela, which is about 17 miles away. Ironically, that country has the cheapest gasoline prices in the world: $0.08. It’s not a typo, the price is literally eight cents per gallon.
What conclusions can be drawn from the above information? Gasoline in Aruba is not inexpensive. As a smile island economy, this is not something unique to Aruba.
Together with the high gasoline prices, high cost of living, and a higher standard of living in comparison to other territories in the Caribbean, Aruba is considered to be expensive.