GEBE-SOL fuel talks failed over lack of transparency in pass-through costs

GREAT BAY--Prime Minister Dr. Luc Mercelina told Parliament that negotiations between NV GEBE and SOL on a new fuel contract failed because of what he described as a lack of transparency in the charges proposed by SOL.

Responding to questions during Friday’s public meeting on matters related to GEBE, the Prime Minister said SOL identified elements such as premiums, freight, insurance, procurement, losses and related charges as direct pass-through costs. However, he said GEBE requested evidence to substantiate those costs and SOL indicated that no further information would be provided.

According to Mercelina, SOL’s position was that its margin is covered solely by the marketing differential. He said the pass-through costs have increased substantially over the years, with references made to COVID-19 and the war between Russia and Ukraine as part of the explanation for the increases.

However, the Prime Minister said those explanations were not substantiated in a transparent manner.

Mercelina also pointed to what he described as a regulatory gap in the fuel supply structure. He said SOL’s price-setting for regular consumers is regulated, but the pricing of fuel supplied to GEBE for electricity generation is not regulated.

The Prime Minister said this distinction is important because GEBE’s fuel costs are ultimately passed through to consumers through electricity bills. He said the lack of regulation and transparency around the fuel supplied to GEBE raises concerns about how those costs are verified, justified and reflected in utility rates.

Mercelina said SOL’s ownership of storage facilities and established delivery routes also create significant barriers to entry for other suppliers. He said this contributes, to a certain extent, to SOL’s market position and reduces flexibility in the fuel supply chain.

The Prime Minister said government is not approaching the matter as a political dispute between GEBE and SOL, but as a regulatory and long-term stability issue.

He told Parliament that government, through the Minister of Tourism, Economic Affairs, Transport and Telecommunication, is working on a structural plan to strengthen St. Maarten’s position in the fuel supply chain and reduce vulnerabilities caused by reliance on a single provider.

According to Mercelina, that work is ongoing and will be presented once finalized. In the meantime, he said government’s focus is on ensuring continuity of supply, safeguarding the public interest and supporting GEBE while the company’s internal governance structure stabilizes.

The Prime Minister also addressed questions about whether fuel used for electricity generation, including light fuel oil and heavy fuel oil, can be regulated under the existing price ordinance framework in the same way gasoline and LPG are regulated.

He said government’s goal is to ensure price stability and consumer protection across all fuel segments in St. Maarten. However, he cautioned that regulating retail fuel at gas stations is fundamentally different from regulating industrial fuel imports used for national power generation.

Mercelina said industrial utility fuels are tied to large-scale international procurement, bulk maritime logistics and supply agreements. He said any extension of price regulation must be supported by transparent economic data to avoid unintended disruption in the country’s fuel supply chain.

The Prime Minister said the ministry responsible for price controls and economic regulation is conducting the necessary data collection and financial reviews. He said government cannot yet state definitively whether full regulation of fuel supplied to GEBE is the route it will take, because the matter requires precise financial modeling and verification.

Mercelina said government is prioritizing accuracy over speed in order to protect the public interest. Once the technical assessment and data-backed framework are finalized, the matter can be brought to the Council of Ministers for consideration.

The Prime Minister said the broader objective remains to improve stability, transparency and consumer protection in the fuel supply chain while ensuring that GEBE can continue providing electricity to the public without disruption.

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