The Tribune

By NATARIO McKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net BAHAMIAN petroleum retailers yesterday said rising oil prices have wiped out all benefits from the margin increase granted by the Government last year, one telling Tribune Business that "sooner rather than later" very few stations would be in business. Vasco Bastian, operator of the Esso station at East Street and Soldier Road, told Tribune Business: "The adjustment the Government gave us was a band-aid. That is not to say that we don't appreciate what the Government did. We got a little 10 cents and everyone went quiet. That 10 cents was depleted the following week. Ever since we got the 10 cents it's like everything was lined up against us. Any fuel increase after that was to our detriment. "We need to address the problem on a macro, rather than a micro, level because the impact on a national level will be sooner rather than later. We need all parties to come to the table and address the issue once and for all. I don't think people understand the problems that dealers face. People seem to think we make a ton of money. I want the general public to know that sooner rather than later, very few stations will be in business" Mr Bastian said many retailers were unsure as to how long they could remain in business. "The Government needs to realise that not only their children have bellies," he added. "Everyone wants to eat, not just a selective few. Based on the current models, gas station operators and dealers don't know how long they are going to eat. The roadworks have impacted my business significantly, and I have kept every employee. I have put heart over profit. I would rather feed a guy than send him out there on the streets to commit armed robbery." Mr Bastian said the Government should look at either deregulating the industry, or allow retailers to earn a percentage per gallon - rather than a fixed margin - to facilitate a profitability as oil prices fluctuate. Last October, the Government increased gasoline and diesel margins by $0.10 and $0.15 per gallon, respectively. Gas retail margins had been previously fixed at $0.44 per gallon of gasoline, and $0.19 per gallon of diesel. Gasoline now stands at $0.54 cents per gallon, and is $0.34 cents per gallon of diesel. The BPRA had asked for an increase of $0.74 per gallon for gasoline and $0.47 per gallon for diesel. One retailer told Tribune Business that with fuel prices rising, the fate of retailers was looking even more grim. "With fuel prices rising it means that some retailers are going to be put out of business," they said. "The margin increase didn't present much relief. You have to look long-term. Now the fuel prices have gone up. When the fuel prices go up, everything goes up. Expenses go up. "The franchise owners aren't doing anything. You still have franchise fees which could end up in the hundreds of thousands a year. The situation isn't getting any better; it's getting worse. The Government gave 10 cents and BEC comes along and they add $0.25 to that. Gas isn't selling as fast as it should. Sometimes you can't get profit off the bulk." Arnold Heastie, owner of Heastie's Service Station, told Tribune Business: "When you use a band-aid, sooner or later you will need a bandage. It's going to be very hard for that margin increase to be any good to dealers with the prices going up. "You have to admit it would have been much worse if you didn't have it. We anticipated oil prices going up, and it was going to be eroded. This is going to be a sore point, especially with retailers who have rent issues. A lot of issues aren't being regulated, such as contracts and ownership of the stations, which is a main concern that is not being dealt with." Retailers operating under the fixed margins are expected to not only generate a profit but cover rising fixed costs, such as labour, electricity bills and the various fees payable to the oil companies - rents, royalties and franchise fees and the like. Gas prices currently hover around $5.70 per gallon. Minister of state for the environment, Phenton Neymour, said there has been "some movement" towards creating a promised commission to look into whether the Bahamas' petroleum industry should be deregulated and price controls removed.