The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Bahamas Petroleum Dealers Association’s (BPDA) said that the price of diesel coming down is more to do about the wholesaler working behind the scenes than it is the government lowering taxes on gas and diesel.

Vasco Bastian, the BPDA vice-president, told Tribune Business that the wholesale price of diesel form Sol Petroleum Bahamas Ltd is something the Ministry of Economic Affairs already did two weeks ago with gasoline and is indicative of the price of oil on the international market continually trending downward.

Mr Bastian also said: “All this is basically saying is that Esso is being able to buy their diesel at a cheaper price and they are passing it on to the Bahamian consumer. That’s what Esso is saying.”

He added: “But behind that price there is still the government tax and duty and everything like that. So Esso is being able to negotiate a better price from the wholesaling side and they are passing that on to the Bahamian public.”

The government placed a notice in the newspaper that said that the price of diesel will change to a maximum of $6.34 per gallon.

This by no means is as a result of the government reducing taxes on the petroleum industry, something Prime Minister Philip “Brave”Davis hinted at doing two weeks back. “This is strictly as a result of Esso doing a lot of work behind the scenes and nothing to do with the government,” Mr Bastian emphasised.

He continued: “When you see a significant price decline like that it means that Esso is doing a lot of work in the background.” The maximum retail price for diesel will now be $6.34 plus Value Added Tax (VAT), with the maximum wholesale selling price $5.95 in New Providence.

This is good news for the owners of diesel vehicles, bus drivers and other heavy equipment that run on diesel, but this reduction is no where near the lows of even last year, let alone the relative fuel price lows of the 1990s.

The government continually provides lip service to the concerns of the petroleum industry while motorists suffer with getting around the gasoline prices hitting a $7 plus high this year. The government has had discussions with the BPDA on how they can bring the price of gasoline down for consumers, but after several months of discussions nothing has been finalized and both sides are at the same position they started at when they first began having meetings in earnest on the matter.

The Minister of Economic Affairs, Michael Halkitis, has already rejected out of hand one of the BPDA’s requests for an increase to their margins, something that has not been done since the last Hubert Ingraham Free National Movement administration between 2008-2012.

Mr Halkitis argues that a margin increase for retailers would be a burden to the consumer only, but has not articulated how this would be a burden for a consumer despite the consumer suffering with high gasoline prices now.

The BPDA have said that a margin increase would allow them to buy fuel at this higher prices because many of their members were on the brink of closing down, but with prices going back down again, even they have changed their tone and are now walking in step with what Prime Minister Davis has suggested in that of a decrease in VAT, but no start time determined or time limit specified neither a percentage rate determined for this VAT reduction on gasoline.

Mr Davis also promised a reduction in shipping rates for oil transshipment nearly five months ago, but that also has not materialised as yet.

Mr Bastian added: “The only thing that could help the retailers now is if they sell more in volume and then the cost of it would be cheaper for us to buy now at the lower cost. But the real people who are going to benefit from stuff like that would be the motoring public. This is Esso doing their part from a corporate point of view in the background to lower prices and they are passing it on to the motoring public.”