The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Taxi Cab Union’s (BTCU) president is voicing fears that the imminent margin increases granted to petroleum retailers may force some drivers to “price gouge” once again.

Wesley Ferguson told Tribune Business that the margin rises, which Prime Minister Philip Davis KC last week confirmed have been approved, will “eat into tremendously” the recent 10 percent fare increase granted to drivers by the Government given the high volume of fuel they require to operate.

While not criticising the petroleum retailers for their advocacy efforts, he argued that “getting an increase on the back of someone else” was not the best way to address that sector’s concerns as he called for taxi drivers to be given a discounted rate on their fuel purchases.

Acknowledging that some may view his comments as “over the top”, Mr Ferguson told this newspaper that the margin increase impact has to be viewed in the context of already-high costs to operate a taxi in The Bahamas.

He pointed to the need for a public service driver’s licence, BahamaHost training and multiple vehicle inspection stickers as just some of the expenses that taxi drivers and owners grapple with regularly, as well as higher insurance and maintenance costs and the need to replace vehicles on a regular basis.

Speaking after it was confirmed that petroleum dealers will shortly enjoy 25 cent and 16 cent increases in their per gallon gasoline and diesel mark-ups, respectively, Mr Ferguson told Tribune Business: “That will have a very negative impact on the taxi drivers. That will be, in essence, taking back the 10 percent [fare] increase they already have.

“It’s September which is usually very slow. It’s extremely slow right now, and with the increase in the number of taxis on the road, the fares will not be very frequent for drivers. They will not have as many fares as they normally do for September and October, and to pay more for gas especially after the fare increase, it may cause taxi drivers to be forced to price gouge.”

The increases approved by the Government will take the margins to 79 cents per gallon of gasoline, as opposed to the current 54 cents, and 50 cents for diesel, representing 46.2 percent and 47 percent rises respectively.

Mr Ferguson asserted that, given the amount of gas that tax drivers have to purchase and the frequency with which they have to do this, the margin increases will erode the impact of his industry’s recently-approved fare rise and “eat into that tremendously”.

The union chief said it normally costs drivers between $70-$80 per time to totally fill their tank from empty on Japanese-manufactured vehicles, estimating they do this at least once every two days when enjoying regular customer volumes. As a result, he suggested most drivers are spending at least between $200 and $300 per week on fuel alone, and sometimes more.

“It’s seven days a week,” Mr Ferguson added of the taxi business. “It’s not like you have a regular day off. They have to fill up every day. They cannot do without it.... We have to do a balancing act on how much fuel we’ll put in, and use the monies we spend on fuel to operate.

“A taxi, some people may think my statements are over the top, but when you look at it it costs a lot to operate with regards to driver’s licence, public service driver’s licence. We have to do BahamaHost training and there are two inspection stickers we have to pay for every year.

“We also pay more for insurance. Maintenance costs a lot, and we have to factor in the cost of replacing a vehicle after a couple of terms.” Diesel prices at Rubis, Esso and Shell were yesterday said to be $5.05, $4.70 and $5.04 per gallon, respectively.

Based on this, a taxi running on diesel and filling up with $80 at either Rubis or Shell would be able to purchase 15.85 gallons. The 16 cent per gallon margin increase would add about $2.53 to the driver’s fuel purchase price.

Mr Ferguson told Tribune Business he was not opposed to the petroleum retailers enjoying a margin increase but argued that taxi drivers are deserving of their “own special price” on fuel purchases because of the quantities that they consume and how reliant their business is on this commodity.

“I would not disenfranchise anyone’s business,” he said. “Only they know what it costs to operate a fuel station franchise according to the law. I would not discourage anyone from calling for an increase because inflation over the last three to four years has gone up so much that everyone is entitled to an increase.

“I don’t want to disparage anyone for an increase. I don’t run a service station, so I don’t know how much it costs to operate it on a daily basis. I don’t want to make it seem like the taxi drivers received it and no one else. Costs are increasing all around so everybody needs extra financial assistance to make sure their business runs smoothly.

“It’s important that they get an increase, but they should not get an increase on the back of someone else. That’s not an effective increase.... It would have been a better idea if the Government would give the taxi drivers a break on the fuel. There should be a special price for taxi drivers because we consume the lion’s share of fuel.”

Transportation industries will be among those hardest hit by the gas margin increase. Jitney drivers and operators last week warned they may stage a protest of their own as a result unless public transportation companies receive similar financial relief.

Harrison Moxey, the United Public Transportation Company’s (UPTC) president, told Tribune Business the industry has been seeking fare increases for years to help counter ever-increasing operating costs but has not received what it needs.

While the Government granted a recent rise, he added that it fell short of what was asked for, and argued that the Davis administration should now provide further incentives to bus owners and drivers to ease the burden that will be imposed once the new 16 cents per gallon margin increase for diesel takes effect.

Otherwise, Mr Moxey warned, they will “have to be the next protestors”. He added: “We need relief on some other end. We was requesting that the Government look at other measures to try to offset the cost to the public transportation industry.

“That is giving us some type of relief on licences when you have to licence the vehicles, or where the Government would give some incentive, some fuel incentive, for us to operate because it’s already hard operating under these inflated conditions, even with servicing and maintaining the vehicles.

“We have had, in some cases, a 100 percent to 150 percent increase on parts and things that we have to purchase. Insurance has also gone up. Everything has gone up. It only makes it that much harder for us to survive. And so we’ll be pushing for them to let us know what the position would be towards us, or we’ll have to be the next protesters.”