The Tribune

By LEANDRA ROLLE

Tribune Staff Reporter

lrolle@tribunemedia.net

ECONOMIC Affairs Minister Michael Halkitis said the government is planning to meet with the Bahamas Petroleum Dealers Association today to address their concerns about rising fuel prices, among other things.

On Sunday, Vasco Bastian, the association’s vice-president, told The Tribune the group was trying to ward off a planned Easter weekend strike by around 80 percent of operators.

He said the planned action was in response to soaring fuel prices and the losses incurred by operators as a  result of the spike.

Yesterday, Mr Halkitis said he does not believe such an action would happen, adding it is his hope the two parties will be able to work together to come to an amicable agreement.

“Our communications so far with the association has not included any ultimatum whatsoever put to the government so we will meet with them and see how we can address some of the issues that affect them,” the minister told reporters before yesterday’s Cabinet meeting.

“I know just from my research and advance of the meeting that some of the issues that have been plaguing them are the very high costs to rent their premises and the fact that the company that controls the premises also takes off a sum of the convenience store sales, the sea store sales off the top and also some of them have to pay what is known as franchise fees and so they have a very high cost structure.

 “But as I said, we will sit and speak with them and hear their issues and as we normally do, agree where we can to bring some assistance but in terms of a strike and a looming strike, it’s not my information that that’s the position of the Petroleum Dealers Association and so we’re going to sit down with them in the spirit of working together looking to see how we can bring them some relief.”

 Yesterday, Mr Halkitis also rejected the association’s suggestions that the government was benefiting the most from the situation due to taxes imposed on the industry, arguing the fees were at a fixed rate.

 He also said the government was not considering increasing the profit margin at this time. Earlier this week, The Tribune reported that gas station operators are seeking a 50 percent margin increase and for its calculation to be based on a percentage, as opposed to a fixed amount.

 “Firstly, the government is not benefitting from the increase on the cost of fuel because the government has a fixed tax on gasoline,” Mr Halkitis said.

“For diesel, it’s a combination of a fixed and what they call ‘ad valorem’ which means it fluctuates but for gasoline which most individuals consume, the government’s tax is fixed so whether the price goes up or down, the government’s tax remains the same so it’s not that we’re benefiting from any increase in the price of fuel. We all lament the increase in the price of fuel. . .from external circumstances.”

 With the cost of fuel at the pumps now surpassing the $6 threshold, some gas operators are considering operating self-service gas stations to help cut high costs.

 “We can’t mandate that they must offer a particular service,” Mr Halkitis said of the potential move yesterday.

 “That has been aired as a possible remedy for some of their increased costs but from what I gather is that costs have gone up and some dealers are having difficulties re-supplying themselves so as prices have gone up, the cost of a tank. . .to supply the station has gone up and some has had difficulty in cash flow and doing that and so as I said, we will sit at the table with them and hear their concerns.”

 Local officials​ and industry stakeholders have predicted a high of $8 per gallon of gas this spring if the situation does not improve.