As world oil prices fall, the Island is feeling the benefit with the price of gas now at its lowest since 2010, and power firm Belco also cutting its rates.

Rubis last week set its gas price at $1.767 a litre — a 17.1 cent fall compared to November prices, while the price of diesel has gone down 14.8 cents to $1.602 a litre.

Businesses and householders will soon feel more of the benefits of the lower oil prices when Belco cuts its fuel adjustment rate to 12 cents next month — which follows a December fall to 13 cents per kilowatt hour, down 4.5 cents compared to the November rate.

A Belco spokeswoman said: “Belco endeavours to minimise the cost to the customer by negotiating the best possible prices, purchasing when the market is low, selecting the most economical fuel and maximising plant efficiency.”

Rubis said its gas prices were at their lowest since February 2010, while the price of diesel has not been so cheap since Cup Match of the same year.

The Belco spokeswoman said that the cost of fuel for the firm was the total of the price paid on the world market, plus tanker transportation to the Island and the standard Bermuda Customs duty of $15.10 a barrel.

She added: “As the actual cost of fuel changes on the world market the fuel adjustment cost changes.”

The fuel adjustment rate is set every month by the Energy Commission, based on a calculation that includes the cost of fuel and projected usage, and starts with a base cost of $30 per barrel of fuel.

The moves follow a plunge in the price of oil to below $60 a barrel, its lowest level in five years, although it rallied slightly on Friday, closing at $62.15 per barrel.

OPEC, a group of the major oil producers, last month failed to agree on production cuts, largely because Saudi Arabia, OPEC’s biggest oil producer, opposed cuts in its own exports of crude.

OPEC controls around 40 per cent of the world market in oil.

Saudi petroleum minister Ali Naimi said that “a lack of cooperation by non-OPEC production nations, along with the spread of misinformation and speculators’ greed” had contributed to the slump in the price of crude oil.

Saudi Arabia, which has massive reserves of cash built up over years, is better able to weather lower prices — unlike non-OPEC nations like Russia and OPEC members Iran, Iraq and Venezuela, who need prices higher than the present levels to meet their budgets.

Analysts said the bearish fundamental conditions of massive production and shrinking demand remain in place and are expected to continue in the first half of 2015.

Macquarie Bank strategist Vikas Dwivedi said: “We continue to see further downside risk for Brent as the oversupply in the global market continues to grow,”

The Royal Gazette tried to contact Esso Bermuda regarding this story, but had not received a response by presstime.