Based on the Prices Ordinance 1961 (Official Gazette 1961, no 117)* containing the regulation of the frameworks of economic supervision on fuel supply, also its derivative Guideline tariff regulation fuels is applicable to the regulation of the wholesale price of the dominant supplier Curoil, and to the end user tariffs for regulated fuels. The regulated fuels include: Mogas 95 (gasoline), Low Sulfur Diesel (LSD), Liquefied Petroleum Gas (LPG) and fuels for Aqualectra (Gas Oil (HSD), Diesel (MDF) and Marine Fuel Oil (MFO)).

The regulation of the tariffs for fuel products in accordance with this guideline comprises the regulation of the various elements that constitute the wholesale price and the end user tariff:

• The purchase price
• The permitted margins
• The cross-subsidy between the products
• The surpluses/deficits as a result of deviations between estimated and actual costs
• Taxes

Based on these pillars for the regulation, a number of components are distinguished, which determine the tariff structure for the calculation of the wholesale prices and end user tariffs.

The components are:

• Purchase price: weighted average based on the purchase invoices from Curoil
• Import Duty: import duty to be levied on the concerned commodities
• Fuel supply guarantee: coverage of the necessary operational costs of the refinery for the fuel distribution in Curaçao
• Margin Curoil: the wholesale margin for each unit of fuel sold
• Excise Tax: the excise tax determined by the government (is only levied on Mogas 95)
• Turnover Tax: turnover tax of 6% for wholesale and retail
• Surplus/Shortage: adjustment of the purchase price based on actual figures
• Cross-subsidy: cross-subsidizing, if any, if applied
• Dealer margin: the retail margin for each unit of fuel sold
• End user tariff: Added sum total of the above-mentioned items

Read more about the tariff structure and calculation methodology for the calculation of the prices for regulated fuel products under Tariff structure.

Frameworks for tariff adjustments

Since the fuel prices are sensitive to international fluctuations it is desirable to locally adjust the wholesale prices and end user tariffs for regulated fuel products on a monthly basis.

The basic principles for the regulation of the tariff adjustments have been laid down in the guideline as follows:

• A monthly adjustment of fuel tariffs based on amended purchase prices: This is done in accordance with a fixed procedure for the application by Curoil for the tariff adjustment, the manner of treatment of the application by the BT&P on behalf of the minister and also the adoption of the resolution by the minister regarding the adjustment and its publication.
• A quarterly adjustment of fuel tariffs for the determination of the surpluses/deficits that may arise as a result of the actual purchase prices deviating from the estimated purchase prices in the monthly setting of tariffs and the actual use deviating from what was forecast. Each quarter, the surpluses/deficits in the fuel tariffs are incorporated in the tariffs for the next quarter.
• An annual evaluation or in case necessary an adjustment of the margins of Curoil, the gas station operators and the tax/excise tax structure, based on separate books (cross-subsidy).

* Note: This National Ordinance has not yet been adapted to the new constitutional structure effective as from 10 October 2010.