A letter from the manager of Hovensa’s St. Croix fuel rack on Monday repeated the company’s warning that it is preparing to shut down the facility.
The letter from Richard Layton, manager of the facility, to truck rack customers and haulers cited Hovensa’s "deteriorating financial condition" for the move.
"As you may have heard, based on its remaining cash, Hovensa cannot fund operations beyond the middle of December, and our owners will not provide any funds for operations to continue beyond that date," Layton wrote.
He said the government has been advised of this several times over the last 18 months.
Layton’s letter said Hovensa will make no further purchases of fuel. He said the stock of regular and premium gasoline is expected to last until about Jan. 7 and diesel supplies will be consumed by Feb. 12.
Hovensa reached agreement with Atlantic Basin Refining to sell the St. Croix refinery, subject to ABR and the government executing an operating agreement. The proposed agreement was the subject of an extensive Senate hearing Nov. 11 and 12, and lawmakers voted to send the deal to the Finance Committee for further discussion.
The report of the impending closure of the fuel rack was discussed during the hearing.
"If the Operating Agreement between the GVI and ABR currently before the Senate is not approved by mid-December, thereby allowing the sale of the refinery to take place, Hovensa’s cash will be depleted and the company will commence the process of shutting down its fuel storage terminal," Layton said in his letter. "Once the remaining fuel supply is exhausted, Hovensa’s truck loading rack will be shut down."
Layton said, effective immediately, Hovensa will limit fuel purchases for every customer to volumes consistent with the customer’s purchasing during the first two weeks of November.
So has our VI government officials made plans to have our fuel supply continue uninterrupted when Hovensa shuts down their fuel rack facility? They have had 18 months notice to plan for this eventuality. I think we would all like to hear from our officials as to their contingency plans for an alternative fuel source. Having Hovensa/ABR hold us over the barrel to sign the operating agreement when they shut down the fuel facility seems very coincidental and premeditated.
So Governor and Senators, what are your plans to deal with this problem that stands to effect each and every one of us in the USVI?
Do you have one?
The contingency must be the plan going forward and the plan going forward must be sustainable. St. Croix must have its own fuel dock, storage tanks, and loading rack (its own Terminal). This will give us the autonomy that we need from now on and going forward. It is a must. I know that many parasites and opportunists are thinking to themselves when they read what I have written,’Why’? Why not wait until ABR takes over and we can piggy back off their system; just like we did with Hovensa. The reason as I see it is due to flexibility and autonomy. A terminal that can be tied into the Hovensa facility as well as receive shipments from outside sources is both VERSATILE and MULTIFACETED. It is better to pay a few cents more per gallon (as a tax) to maintain a terminal of our own than to be subjected to the vicissitudes caused by others. This terminal will afford us a degree of freedom and an air of independence. In other words, Hovensa is kicking us off its nipple and I for one am elated that we are finally getting off that 40+ year old tit. Are we now hoping to suckle the very small breast of ABR? Wake Up People!
Alana, please wake up. It is not the duty of the government officials to provide STX with fuel. Leave that to the free market. This is great opportunity for a smart Cruzan to come up with a business plan and provide fuel to STX. FYI, St. Thomas has weaned itself from the Hovensa
“tit” as Chilliwest as put it. St. Thomas fuel now comes from other sources. Hovensa could close today and STT would not be affected. Wake St.Croix!