Understanding Fuel Pricing in Bermuda: The RA’s Role and Recent Decisions

The Regulatory Framework

Fuel pricing in Bermuda operates under the Fuels Act 2022, which transferred responsibility for oversight from the Ministry of Finance to the RA. The pricing methodology currently in use was developed prior to that transition and has remained unchanged since its implementation in January 2024.

Under this framework, fuel importers submit monthly pricing proposals to the RA. Each submission is assessed against a structured and formula-driven methodology consisting of six components:

• The rolling three-month average of free-on-board (FOB) fuel costs at the US Gulf Coast (sourced from Platts)
• The Caribbean posting differential
• Wholesale gross margins
• Government-set duty rates
• The UNESCO tax
• Retail margins

These elements are reviewed for accuracy and consistency, with cross-comparisons conducted across importers to ensure alignment. The use of a rolling three-month average helps to moderate short-term volatility in global fuel prices. Importantly, the monthly process is not discretionary. The only variable component within the framework is the global cost of fuel. All other elements remain fixed unless amended by Government policy.

April 2026: Sequence of Events

In April 2026, fuel importers submitted their pricing proposals in the ordinary course. The RA completed its technical assessment and issued its determination on 14 April 2026 in line with the established methodology.

On 16 April 2026, the Retail Fuels (Consumer Protection Standstill) Ministerial Direction 2026 was issued. Following the Direction, the Board convened to consider its response within its statutory remit. This included assessing the practical implications of implementing the Direction, particularly in relation to the absence of a clearly defined mechanism to offset the financial impact on fuel importers. At that stage, the Board determined that immediate implementation without such clarity could introduce great risks to the island’s fuel supply. The Board therefore maintained its initial determination while engaging with Government and industry stakeholders to seek further clarity.

Subsequent discussions with the Ministry of Home Affairs and the Ministry of Finance, along with correspondence from the Minister, provided additional detail regarding a proposed mechanism to offset revenue shortfalls associated with the standstill.

The Board’s Decision

Following receipt of this clarification, the Board convened in emergency session on 19 April 2026 and resolved to suspend its 14 April determination. Retail and wholesale fuel prices were aligned with the standstill levels set out in the Ministerial Direction, while the Board retained discretion to revisit the matter as further information becomes available.

Balancing Competing Priorities

In reaching its decision, the Board was guided by its statutory obligations under the Fuels Act 2022, including:

• Protecting the interests of consumers
• Ensuring security of supply
• Maintaining reliable service

These considerations must be balanced. While fuel pricing directly impacts households and businesses, the underlying systems that ensure fuel availability must remain stable and financially viable. The Board’s approach reflects a structured, evidence-based process that considers both immediate consumer outcomes and the longer-term resilience of Bermuda’s fuel supply chain.

Conclusion

The RA will continue to engage with the Ministry of Home Affairs, the Ministry of Finance, and industry stakeholders to support the development and implementation of a clear and effective compensating mechanism. The Board will retain oversight of this matter and will convene as necessary to ensure that all decisions remain consistent with its statutory mandate.