Starting a long time ago in the rural regions of the island, where lampposts and cables of the former Autoridad de Fuentes Fluviales did not arrive as quickly as in the cities; liquefied petroleum gas (LPG) has become the main fuel for low-income families of Puerto Rico but, come hurricane season, it's also the fuel of all social classes who brace for power failures.

After hurricane María, and with a weak and ever more expensive electrical power generation, propane is poised to have a resurgence as an option for industries that sought independence in their operations and consumers that considered investing to convert their fridges, washers and dryers to this fuel as a means of saving. It is estimated that at least 600,000 families in the island use propane gas as a source of power.

However, with administrations of both parties turning a blind eye, the propane gas industry in the country has fallen in the hands of two groups that, according to documents obtained by NotiCel and the team of Jay y sus Rayos X in a joint investigation, have financial ties with each other. This would mean that a monopoly in the distribution of propane gas is in effect for Puerto Rico with clients paying prices that do not necessarily correspond with the offer and the demand of a free market, for decades.

A study in 2013 determined that the sale of liquefied gas in Puerto Rico has an average profit margin of 53%, which oscillates between 47% in sales to fast food restaurants, to 61% in sales to the government. In 2015, it was established that the price of a gallon of gas in Puerto Rico was $3.52, while worldwide the price was at $2.11. Another economic analysis estimates that the amount of money Puerto Ricans have overpaid for liquefied gas would be around the $300 million mark.

Currently, the market is divided into three importing companies: Empire Gas, Tropigas, and Puma. But the market is far from being equal, with Empire in charge of 70%, Tropigas of 23% and Puma of 7%, according to expert documents submitted to regulatory agencies.

If you identify the gas tank you bought for your beach day, for your business or for your stove with some other brand name it's because the gas industry has three divisions: importers, bottlers, and retailers who actually sell the tanks you take home. Even though importers are only three, in the other two areas there are dozens of medium and small companies that make up the commercial 'pipeline' by which propane gas is circulated around the island.

Those smaller companies are at a disadvantage against the importers because the license for importing includes an authorization to do everything, from bringing the gas from outside the country to taking the gas to the consumers' home. Ergo, bottlers and retailers compete with the same companies that supply them their gas.

Worse still, government reports show that Empire Gas loaned money to bottlers and retailers and as consequence for being unable to repay the debt, they would fall under their control meaning that this company held the market in its hands not only by the amount of gas they import but also for the influence they have over other players in the industry.

The investigative team of NotiCel and Jay y sus Rayos X spent weeks trying to get an interview with Empire Gas founder, Ramón González Cordero, and his son, Ramón González Simounet, to discuss the findings of the investigation but they were not available, not even after we showed up unannounced at their company's main offices in Río Piedras.

The discovery that proved more intriguing even for those sources that have dedicated all their lives to the LPG industry, that in the month of August 1995 two transactions were consumated that, taken together, might have been the foundation for Empire's current control of the LPG market in the island.

It began in August 4, 1995 with the purchase of Tropigas International Corporation by CHDR, Inc. for the amount of $3.2 million.

Later, on August 31, 1995, González Cordero, who founded Empire Gas in 1967, loaned $400,000 to CHDR, Inc. which put up 100% of its Common Stock as collateral. That loan was a transaction by which the president of Empire Gas injected $400,000 to who has been his sole competitor for years. The documents do not indicate how the repayment ended and González Cordero was not available to discuss it either. Even now, 90% of the gas market is managed by Empire and Tropigas.

The transaction occurred roughly one year after the Senate held public hearings on the industry. At that time (1994), there were six importers, double the amount we have today, and even with that scenario, the Department of Consumer Affairs (DACO by its Spanish initials) declared that 'the industry's scheme does not present the best atmosphere to achieve favorable levels of competition in the best public interest'.

'While the price of oil has come down by more than 50% since 1986, the prices of liquid gas for the 100 pound cylinder has maintained at the same price range', DACO added in its presentation.

Empire Gas attended that hearing, where they complained that their then competitor, Gas del Pueblo, was lowering the costs to disrupt the industry. To corroborate that information, they asked the senatorial commission to summon Luis Humberto Berríos, who happens to be the executive who signed the deal with Empire for the $400,000 loan the year after the hearing.

At the time of the loan to its competitor, Empire Gas was operating for 28 years and, according to records from the State Department, their executives were also involved in at least another two related companies, Empresas de Gas, Co. Inc. and Empire Mortgage. The latter worked as a bank to finance other smaller players in the gas industry with the condition, according to a source, that those who received aid would buy exclusively from Empire.

To this date, and according to financial reports in the hands of the investigation team, Empire Gas is part of a 'group of controlled properties' with another 32 enterprises, which in legal terms means, that the corporate conglomerate of Empire Gas is of at least 33 companies.

In a public hearing at the Puerto Rico House of Representatives in 2014, González Cordero admitted they financed retailers and trained them but that 'they are owners of their business'.

'We made entrepreneurs out of chauffeurs because we gave them the equipment, the technical aid, the counseling to obtain their licenses and in many cases we also developed their credit plans, you know, financing,' he stated.

The secretary of the Federación de Distribuidores de Gas Unidos de Puerto Rico (FEDIGAS), Carlos Jurado Roque, assisted in that investigation and, speaking 30 years after the Senate hearings of 1994, summed up the three problems that affect the gas industry as 'the absence of real competition at the importers or wholesalers level, disloyal competition from these importers towards the retailers and absence or poor inspections from the agencies with jurisdiction in the industry'.

The last government action that was registered in the industry was in 2015, when DACO emitted a provisional order freezing the profit margins because the prices of gas worldwide had gone down, but that was not reflected in the prices in Puerto Rico, which was what the agency had claimed in the 1994 hearing. Other than this repetition of problems with the prices, at the moment no agency has decided to attack head on the fact that the market in the island is controlled by only two companies, which could be only one if the potential consequence of the loan between González Cordero and CHDR is taken into account.

At the time of the order in 2015, the price of a gallon of gas in Puerto Rico was $3.52 while worldwide it was $2.11. After the entry of Puma that same year, who holds a measly 7% of the market, prices have gone down to $1.39 a gallon.

Madeline Martínez, president of Quality Foods Company, a company that manages cafeterias and uses LPG, explained that 'we have been six years and a half in this industry and it wasn't until last year, and then maybe after hurricane María, that this competition between companies with better prices and client service started'.

'We pay by the liter, and the difference is significant. I had paid $2.75 for the gas and I am now paying $1.68. It is very significant and when you work with so much volume in an institutional kitchen which cooks for a lot of clients, the savings are significant,' she added.

Neither DACO or the Monopoly Affairs Office of the Puerto Rico Justice Department were available to answer questions for this story.

Jurado, who's family has been in the LPG business for three generations, said that 'in Puerto Rico everything is investigated and nothing is resolved and my opinion is very personal, I think that the economic power is too strong and many times is a barrier impeding a solution to all this'.

'We do not control, we serve, we serve the market,' said González Cordero during one of his legislative testimonies.

*This is the first of a series of articles investigated jointly by NotiCel and Jay y sus Rayos X.

For DACO's 1994 presentation on the gas industry click here:

For Empire Gas' presentation in the 1994 Senate investigation click here