One of my friends forwarded information relevant to Aruba’s dependence on HFO, the history of hedging and the challenge ahead, as described in a recent 24Ora news item.

Here it goes, in everyday terms:

Aruba’s water and electricity supply remains heavily dependent on imported Heavy Fuel Oil, HFO. For WEB Aruba, who is responsible for producing both essential utilities, the price and availability of fuel are therefore matters of national importance. The history of fuel hedging illustrates how difficult it is to balance price security, financial risk, and political accountability.

Following the closure of the Lago refinery in 1985, Aruba increasingly became dependent on imported petroleum products. Over the years, WEB invested in more efficient generation technology, including RECIP engines, wind energy, solar installations, and battery storage. These investments significantly reduced fuel consumption. Whereas Aruba required approximately 6,180 barrels of HFO daily in 2004, consumption gradually declined to around 3,000–3,400 barrels per day in 2026. Nevertheless, HFO remains essential to maintaining a reliable electricity and drinking water supply.

What we call hedging is a financial strategy that protects against international fuel-price increases by securing prices in advance. It does not necessarily mean physically purchasing and storing the fuel, it just guarantees a fixed price, for a fixed time.

I remember that the island experienced a major controversy in 2014 when WEB entered into fuel-price agreements at approximately US$90 per barrel for a period of two years. When international oil prices subsequently dropped, the contracts became financially disadvantageous. The estimated cost of cancelling the agreements was reportedly between AWG 100 million and AWG 130 million. The episode raised serious questions about management decisions, government oversight and the risks of committing to long-term fixed prices.

A second important moment came in 2021. WEB’s existing hedging arrangement expired on December 31, but no new agreement was concluded. In 2022, international fuel prices increased sharply following Russia’s invasion of Ukraine. The decision not to hedge became politically controversial, as Aruba was exposed to rising fuel costs, contributing to pressure electricity and water tariffs.

According to a report published by 24ora on November 1st, WEB currently has price protection at approximately US$68 per barrel, but this arrangement expires on December 31, 2026. No new hedging agreement for 2027 has yet been concluded.

International reference prices reported at the end of October ranged from approximately US$94 in Houston to US$138 in Singapore. Although these are not necessarily directly comparable with WEB’s delivered fuel costs, they illustrate the potential financial exposure when the current protection expires.

Aruba consumes approximately 3,000–3,400 barrels daily, equivalent to roughly 1.1–1.24 million barrels annually. Every US$10 increase per barrel could add approximately US$11–12.4 million to annual fuel expenditure, assuming consumption remains unchanged.

WEB reportedly has sufficient inventory to limit the immediate impact in January 2027, but purchases at new market prices could begin affecting costs in February and March.

So hence, my friend’s declaration, that it is a horror story and that it might even get worse before it gets any better. Aruba needs a balanced, transparent, and long-term fuel purchase strategy. My friend suggests that rather than hedging 100% of its requirements for several years, WEB could consider securing a portion of anticipated consumption through staggered contracts, while retaining some flexibility to benefit from falling prices. Hopefully.

Equally important are adequate physical fuel reserves, diversified suppliers and continued investment in renewable energy and battery storage.

The proposed Eagle LNG project, announced in 2021 as an alternative to HFO, also deserves renewed interest, not with the same iffy players. The current LNG status and the government’s alternative plans should be made public, if there are any.

Ultimately, electricity and drinking water are essential services, not ordinary commodities. Aruba must avoid repeating the expensive mistakes of the past, while ensuring that it does not leave itself unnecessarily exposed to international fuel-price volatility. The public deserves clarity about WEB’s hedging strategy, fuel reserves, purchasing costs and the potential consequences for household and business tariffs.

The central question is not simply whether Aruba should hedge, but how it can protect the country against unpredictable energy markets while maintaining financial discipline and affordable utilities.

The Timeshare sector supports a decent wage for every worker, and proposes an independent impact study, a phased path, cost-of-living reductions through state-owned companies, and fiscal compensation for higher payroll costs

ATSA shares the goal behind the government’s proposal: anyone who works a full week in Aruba should be able to cover their basic needs. That is not in question. What is in question is how we get there, and whether a higher wage will still be worth something to workers a year after it takes effect.

Today the statutory minimum wage stands at roughly Afl. 2,007 per month, while the subsistence minimum (bestaansminimum) for a single person, as published by CBS, reached Afl. 2,700 in September 2026. Closing that gap in one step means an increase of about Afl. 690 per month, or roughly 35%. With employer premiums and charges of around 25% on top of gross pay, the real cost to an employer approaches Afl. 860 per worker per month, before any adjustment for employees who currently earn just above the minimum. A change of that size should be built on evidence, not on a deadline.

A wage increase on its own is unlikely to be enough without measures that protect purchasing power, employment and the viability of businesses.

Why the research has to come first

Technology changes the equation

Research on minimum wages suggests that moderate, predictable increases have limited effects on employment, while large, abrupt ones carry more risk, often showing up first as fewer hours and slower hiring. Today there is an added factor: self-service check-in, digital kiosks, online ordering and AI-driven reservations are now affordable and readily available.

So the question has to be asked: when labour costs rise sharply overnight, what does a business with thin margins do? For many, the answer will be to automate. And which jobs go first? Front desk, cashier, call centre and back office: the very positions this policy is meant to protect. What is a higher minimum wage worth to the worker whose job has been replaced by a kiosk? Before any decision is taken, the research should show which roles are most exposed.

The cost of doing business is the other half of the equation

Wages are one line in a cost structure that is already among the highest in the region: electricity and water, telecommunications, import duties, turnover taxes, port and airport charges, and rent. Where margins are thin, an abrupt payroll increase cannot be absorbed. It is passed on in prices, including the prices of the very goods in the subsistence basket, and part of the worker’s gain disappears. Every cost Aruba removes from the system relieves both businesses and households at the same time.

Close the gap from both ends: what ATSA proposes

Nobody in our sector disputes that a full-time worker should be able to live decently in Aruba. What we ask is that we measure before we act. A raise that is eaten by higher prices, or that costs someone their job, has not helped that worker. Let us get the facts, lower the cost of living where government can, compensate the payroll burden fairly, and then move step by step towards a wage that lasts.

ATSA remains committed to the Social Dialogue and stands ready to contribute data and expertise from the timeshare sector to the research it proposes.

About ATSA

ATSA was established in 1994 and counts among its active members most vacation ownership properties in Aruba. Together its members operate more than 2,953 room units and provide more than 1,938 jobs.

ArtisA Gallery shared big news recently. For the 2nd time, ArtisA is going to Red Dot Miami during Miami Art Week. You may find the Aruba artists at Spectrum Miami, booth 901, at the Mana Wynwood Convention Center.

Last year Aruba won the Best Booth award together with Perseus Gallery, and thanks to that it  now has its our own 20 square feet spot. This year Aruba is bringing 20 local artists to Miami, so everyone who walks into the booth can take a bite of Aruba.

ArtisA is proud to have the Aruba Tourism Authority as partner in this venture, helping bring the island to one of the biggest art weeks in the world.

The theme this year is Art · Culture · Movement, and ArtisA will use the booth to launch Art Week Aruba 2027.

Wed 2 – Sun 6 Dec

Spectrum 901

Mana Wynwood

Preview night Wed 2 Dec, 6–9 PM · Thu–Sat 12–8 PM · Sun 12–6 PM · Mana Wynwood Convention Center, 318 NW 23rd St, Miami

Come and see us, we have tickets

If you are in Miami that week, or know someone who is, let us know. We can provide tickets so you can visit the fair and the booth. Just reply to this email with your name and the day you would like to come.

Help us get the art to Miami

From $1 to $1,000, everything helps

Even with a great partner on our side, we still need more funds for printing, shipping and production to bring the work of our 20 artists from San Nicolas to Miami. We hope you can help us: be it $1 or $1,000, everything helps.

Aruba continues to debate linking minimum wage to the subsistence minimum, as published monthly by Central Bureau of Statistics. The debate rages on because a change goes in effect on January 1, 2027. Linking the minimum wage to the subsistence minimum is a unanimously approved legislative move, by Aruba’s Parliament on September 1, 2025, under the government led by Mike Eman.

The change introduces a statutory minimum hourly wage of Awg 11.58 for employees aged 18 and older. Additionally, workers doing 42, 44 or 45 hours a week will receive a higher minimum monthly pay than under the previous calculation, between Awg 121 and Awg 271 increase, depending on the number of hours worked. The legislative change approved unanimously by Aruba’s Parliament draws criticism from every business entity on the island including KvK, the Chamber of Commerce and Industry, CUA, the merchant association, and ATSA representing the timeshare resorts.

While the debate goes on, one of my readers sent me The Perfect Storm report published in July by KvK. The report, prepared by Martijn Balkestein for the chamber identifies five interconnected challenges threatening Aruba’s economic and social sustainability.

My reader felt that not enough attention was paid to this learned exploration of our demographics, the island’s housing market, the situation of labor & migration, the cost of housing construction and the dismal elderly care.

The reports states that while these six themes are normally treated separately, in reality, they form one story, a perfect storm, presenting us with a confluence of challenges.

Above, is what the 40-page report explained. Each chapter supported by graphs and tables and in-depth analysis. If you will not read the report, read this.

The starting point is a historic demographic shift: in 2025, deaths exceeded births for the first time. Fertility has fallen to 1.31 children per woman, while the population is ageing rapidly. More than 6,300 workers are expected to retire within five years.

At the same time, tourism continues to expand. Seven planned hotel projects will add approximately 1,850 rooms, creating an estimated 3,900–5,000 additional jobs. With insufficient local workers, migration becomes an economic necessity.

However, migration intensifies an already critical housing shortage. Approximately 4,139 properties are listed as short-term vacation rentals, reducing the supply of permanent housing. Construction cannot keep pace with demand, while the sector itself suffers from a shortage of skilled workers. Housing affordability is increasingly beyond the reach of ordinary Aruban families.

Finally, an ageing population places growing pressure on elderly care. The number of people over 80 is expected to double by 2040, while qualified personnel and care facilities remain insufficient.

The central message: These challenges cannot be addressed separately. Aruba needs an integrated national strategy connecting tourism development, migration, housing, infrastructure, workforce planning and elderly care. Delayed action will make the consequences increasingly difficult to manage.

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https://batibleki.wheninaruba.com/tourism-stewardship-starts-with-who-is-at-the-table/

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https://batibleki.wheninaruba.com/help-active-mirror-get-to-berlin/

Four decades of friendship, family vacations and a pioneering vision for Aruba’s timeshare industry.

https://batibleki.wheninaruba.com/four-decades-of-friendship-family-vacations-and-a-pioneering-vision-for-arubas-timeshare-industry/

Cleaning Up Aruba’s Wastewater, we have some progress to report

https://batibleki.wheninaruba.com/cleaning-up-arubas-wastewater-we-have-some-progress-to-report/

Voluntary Vacation Rental Registration

https://batibleki.wheninaruba.com/voluntary-vacation-rental-registration/