The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Bahamian petroleum retail industry remains “challenged”, several dealers said yesterday, suggesting it was time for the Government to look at the additional $0.05 per gallon margin increase contemplated under the previous administration.

Vasco Bastian, operator of the Esso station at East Street and Soldier Road, said: “There have been several stations that have closed down. The industry is still challenging.

“The Government owes us 5 cents that I think was left by the previous government. We are still waiting on that. We are giving the present government an opportunity to settle in. Speaking for me personally, I don’t want to put any pressure on them at this time. We are holding on as best we can under the current circumstances. This industry is not an easy industry to be in, but I believe there is a great promise and future for this industry.”

  Ryan Knowles, general manager at Wells Service Station, told Tribune Business: “We don’t want the consumers thinking we are the ones making all the money. There have been several retailers that have closed.

“Under the previous government we were issued a partial increase where we got $0.15 cents on diesel, and we were approved for $0.15 cents for the gas.

“However, at the time the previous government gave us $0.10, so we have already been approved by the Government. We are hoping and expecting to get that additional $0.05. We haven’t heard anything yet on that, but we are hoping that we still get our $0.05 increase.”

  Mr Knowles added: “The big picture is we want a percentage, and not just the $0.05. We want to get a percentage like the Government is getting.  I think the public is understanding that we as the retailers aren’t making a lot of money; we’re providing a service. Everything is kind of slowed down right now at this time ,but obviously with the prices on gas having gone back up it’s hurting the business.”

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.

The margin on gasoline now stands at $0.54 cents per gallon, and is $0.34 cents per gallon of diesel. The Bahamas Petroleum Retailers Association had asked for an increase of $0.74 per gallon for gasolinem and $0.47 per gallon for diesel.

  Rodney Eve,manager at Texaco on Prince Charles Drive, said that despite the margin increase many retailers face cash flow problems.

He explained: “The margin increase helped a bit. They gave us a portion of what we were requesting; it sort of kept us flowing.

“Unfortunately, some of the retailers did not survive it. You have to have the money up front to pay for the fuel. That’s where the struggle comes in. The banks have tightened up. The oil companies still require you to pay a prepayment, so if you don’t have that leverage with the bank with the overdraft you could be in a tight position going forward.

“It’s still a tight business. You try to cut as much as you could cut on the expense side. We’re are almost ready for that $0.05 now. It’s a help; it could determine whether you stay or go.”

  Bernard Dorsett, owner of Porky’s Service Station, said the increasing cost of fuel has been challenging for business.

He added: “A month ago I had gas at $4.85. I have been in this business for 40 years, and I have never seen gas go up $0.40 and $0.50 at one time. That’s another $5,000 or $6,000 I have to find to buy a load of fuel.

“I hear that gas has gone up in the US $0.05 cents on the gallon, and ours is going up $0.50 cents and $0.60 cents,” said Mr Dorsett.

“I don’t care about the $0.05 if we can keep the fuel price down. The lower the fuel prices, the better for me, the better for the consumer. Fuel has gone up but almost a dollar. I have to find $9,000 to buy the same load of fuel to make the same money. My profit doesn’t change, my investment changes. At four loads of fuel a week, that’s $36,000 more a week I have to find to buy the same inventory to make the same money.”

Phenton Neymour, former minister of state for the environment, explained to Tribune Business: “Technically we (the Government) approved just a $0.10 increase, but we had seen the need for at least a $0.15 increase for the retailers at that time.”

Mr Neymour, who said he was not in a position to speak on Cabinet’s conclusion on the matter when contacted yesterday, added: “The retailers were asking for significantly more than they got, but we felt that the Bahamian people could not withstand such an increase at that time.”