The Tribune

By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net 

Opposition leader Michael Pintard said yesterday the Davis administration should make a "determination" on the proposal for a margin increase on fuel prices and end the 30-month impasse.

Speaking on Guardian Radio yesterday, Mr Pintard criticised the Davis administration’s handling of negotations with the gas retailers and called for them to indicate whether the terms set out in the proposal are accepted.

He said: “The government should respond to the last proposal that was sent to them by the retailers. When we met with the dealer’s and retailer’s leadership. They indicated that they have a proposal on the table. They were under the impression that there was going to be movement on it, and they are simply awaiting the government responding to them.

“We believe that the government should make a determination. The longer they wait to respond to the proposal, the longer this impasse exists. The government ought to respond to the proposal and indicate whether or not they believe is it is acceptable.”

Mr Pintard also raised concerns about "unfair competition" between gas retailers and wholesaler, Shell, which also has retail operations and called for the Davis administration to clarify how they intend to "remedy" the issue.

He said: “The second thing that we are concerned about is the wholesalers who have retail operations, and we see that to large extent, very much unfair competition when a wholesaler is operating both a retail operation and a wholesale operation.

“And that is a matter that we'd like to hear what the government's position is on that, and how do they intend to remedy that?”

Speaking to Tribune Business, Mr Pintard said the FNM supports "business expansion" and their ability to compete at a wholesale and retail level.

He noted that foreign wholesalers are not permitted to compete at a retail level in the sector and called for increased efforts to prevent foreign wholesalers "sneaking" into the retail sector.

He said: “We support some retailers concerns that every effort should be made to prevent foreign wholesalers from sneaking in the retail sector, whether it is through leasing fuel stations and the retail stores associated with them or through any other arrangement.

“Secondly, we share the concern of some retailers who are leasing from the Bahamian wholesaler but truly wish to own their operation outright and eliminate the uncertainty about their future as lessee. Clearly petroleum retail operators who are leasing their space and running retail stores have greater concerns about the price margin than retail stores ran by their landlord who is also a wholesaler.”

On Tuesday, gas retailers said they were "disappointed" a margin increase was not included in 2024/2025 budget contribution.

Vasco Bastian, vice president of the Petroleum Retailers Association, said members were growing impatient over the 30 months they have been negotiating a margin increase with the Davis administration and are ready to close their business for a "day or two" to demonstrate their irritation.

Speaking to Tribune Business, Mr Bastian said gas retailers are still recovering from the COVID 19 pandemic and find it "extremely difficult" to continue operating under the current rate structure.

He said: “The members were ready to shut down and shut down this country for a day or two and I'm the only one completely opposed to shutting down. It would inconvenience the Bahamian public who are supporting us in this effort and our employees who depend on us.  Fifty nine out of sixty members are ready to shut down, for the last 30 months we’ve been to convince them to not strike and shut down, as far as yesterday.

“We are trying to be patient and professional in our negotations, but at this point, the members are calling for my head, they believe I am being too nice to the government. But we’re at a point now that I'm even frustrated. I'm disappointed because I feel that I've been hoodwinked. It's extremely difficult, we’re still trying to recover from COVID.”

Gas retailers have not received a margin increase since the then Ingraham administration granted one 13 years ago.

Unlike virtually all other industries, which are able to increase prices to cover rising operating expenses, the Bahamian petroleum industry operates on price-controlled fixed margins that require government approval before they can be changed.

Dealers say that, especially following the post-COVID cost of living crisis, ever-rising expenses have effectively wiped out the 54- cent and 34-cent margins per gallon of gasoline and diesel sold, driving them into losses and placing some in a position where they are threatening to close their operations. The government, though, has been reluctant to raise the margins for fear it will increase fuel bills for motorists.

Mr Bastian revealed that retailers have reduced their request for a 30-cent increase in petroleum to 25 cents and have "paused" the request for a diesel increase as it would affect boaters, heavy equipment operators and jitney drivers.

He said he is "heartbroken" that negotations have dragged out so long preventing retailers from making a profit and is ‘saddened’ by the way the Davis administration has responded.

He said: “I'm extremely disappointed with the way we are being handled. I’m totally in support of Bahamian businesses, I'm totally in support of trying to ensure that small, medium sized business like the gas station operators in The Bahamas another small business in the Bahamas survive, but I’m heartbroken at the way we’ve been handled in the last 30 months.

“Really heartbroken that we as Bahamians with families and bills have not been given an opportunity to make a profit or continue to operate in the Bahamas, in this economy, in this environment. It's just extremely discouraging and we’re saddened by the way we've been treated.”