The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

Bahamian petroleum retailers yesterday voiced optimism that their recent margin increase is the “start of more reform” with the rise having brought “much-needed relief” to the struggling dealers.

Vasco Bastian, the Bahamas Petroleum Retailers Association’s (BPRA) vice-president, told Tribune Business that the upcoming Christmas holiday season will be a “lil’ bit better” for the industry after the Government granted their first margin increases since 2011.

The increases approved by the Government raised the margins to 79 cents per gallon of gasoline, as opposed to the previous 54 cents, and 50 cents for diesel, representing 46.2 percent and 47 percent rises respectively. The increases took effect from early October.

“It’s going good, it’s a much-needed relief. Christmas will be a lil’ bit better for everybody - for the employees, the dealers, everybody directly and indirectly in the petroleum business,” said Mr Bastian.

“We can no longer say that we haven’t gotten an increase in years. We can now say that the last time we have gotten an increase is under this government. So we are very happy.”

Mr Bastian said he hopes the margin increase will spark further reforms including a switch from a fixed to a percentage-based system. The latter would move in tandem with global oil price changes, remaining unchanged regardless of this volatility, and thus better enable Bahamian petroleum dealers to afford to purchase their inventories.

Mr Bastian said the percentage could be tied to the consumer price index and inflation, which would ease the pressure on the Association to keep petitioning the Government for margin increases.

“We hope this is the beginning of more reform that will come to this industry. We just don’t want to be an association that is known when we have an issue with gas margins, but we want to be an association that is vocal when it comes to everything and anything dealing with the petroleum industry in this country. We want our seats at the table as this industry continues to grow,” said Mr Bastian.

“We definitely want to eventually become, rather than fixed margin, we want to integrate a percentage rate over time. And we also want to tie the margin to the consumer price index so, as that changes, our margin or percentage rate will also change that way.

“We won’t have to be going to the Government every X amount of years for what we need to survive. As the industry grows, we want to grow with the industry. We want to grow as well as we want to grow with consecutive governments.”

Mr Bastian said retailers are working to make the Association a “well-oiled machine” that speaks for their consumers and brings “value, credibility and professionalism” to discussions involving the sector.

“We want to make sure it’s a well-oiled association who speaks for the motoring public, all persons who use petroleum in their vehicles, be it gas or diesel and for people who operate heavy equipment. We want to be an active voice; a voice that brings value, credibility and professionalism to the discussions with the table all the time,” said Mr Bastian.

As for feedback from the general public, Mr Bastian said “at least 75 percent to 80 percent” of motorists supported the petroleum retailers’ bid for an increase as they understood their financial plight as a result of having inflexible, government-controlled margins.

“We get mixed reviews. For the most part, I would say at least 75 percent to 80 percent of customers were in agreement with us from day one,” said Mr Bastian.

“We reproduced the evidence to the Government, and they saw and heard our cry, and facilitated our cry after three years. We continue to be appreciative to the Government for doing it. The Christie administration didn’t do it, the Minnis administration didn’t do it, but this government did.

“We were a little bit more vocal the last three years, but we’ve been writing. We wrote letters to Dr Minnis, and they never even entertained us. This government entertained us. They saw that our concerns were legitimate and valid, and they helped us and we’re grateful for that. We continue to be grateful for that. Continue to say thank you every opportunity that we get, because it really made a difference.”

Mr Bastian warned that although petroleum retailers are seeing relief from the margin increase, they must continue to control their operating costs so they can remain competitive and effectively manage their businesses.

“We definitely were seeing the difference. But even though we’ve seen the difference, operators themselves must also continue to try to control their operational costs. For the most part, we’ve seen the impact already,” he added.