The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas spends the second highest sum in the Latin America/Caribbean region, as a percentage of gross domestic product (GDP), on oil imports , something a senior private sector official yesterday described as “concerning”.

A World Bank report placed the Bahamas behind only Guyana when it came to sums spent on oil imports, this nation spending equivalent to 13-14 per cent of GDP in 2006. This was described as “significant” by Winston Rolle, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, in an interview with Tribune Business.

The data placed the Bahamas above the Caribbean average of 11 per cent of GDP, and the World Bank report noted: “Countries with a greater share of oil imports as a percentage of GDP generally exhibit greater vulnerability to high and volatile oil prices.”

Acknowledging that numerous factors needed to be considered, Mr Rolle questioned whether other Caribbean and Latin American countries were purchasing better than the Bahamas, and whether the figures accounted for the taxes - especially Stamp Duty - that this nation imposed when fuel imports landed in this nation.

“Is our taxation structure a lot higher than everyone else’s once we get the oil on shore?” questioned Mr Rolle.

But he added: “We all know that electricity costs are extremely high. And, based on Mr Miller’s comments in the paper, we’re nowhere near as efficient as we should be as it relates to energy production.”

The BCCEC chief executive said high electricity costs were one reason why the Bahamas was “not being as competitive as we should be” on the tourism front, as resort properties had to charge top-end prices to cover costs.

“We’re quite aware that we have to do something to get energy costs into alignment, not only from a tourism perspective but an ease of doing business point of view,” Mr Rolle told Tribune Business.

“More and more businesses are finding that energy costs are increasing as a percentage of their expenses base, and are eating into their profits as well.

“It is concerning. That’s one of our major challenges we have as a country. How do we get energy costs down to where they’re amenable?”

The World Bank report described the Bahamas as being among nine Caribbean nations that ‘vertically integrated monopolies’ in their energy sector, BEC and its counterparts being responsible for generation, transmission and distribution.

“A full pass-through power-pricing policy is in effect in the Bahamas and St. Vincent and the Grenadines - where the government is the majority owner of the power utility - and in Barbados, Dominica, Grenada, Jamaica, and St. Lucia, where the private sector is the majority owner,” the World Bank report said.

“This policy is sustainable in the long run as it forces consumers to eliminate waste and then seek pathways to improve consumption efficiency.”