The Tribune

BY ANNELIA NIXON

TRIBUNE Business Reporter

anixon@tribunemedia.net

FUEL prices nearing $8 per gallon are heaping extra pressure on Bahamian petroleum dealers, it was asserted yesterday, with one Exuma-based operator reporting gasoline at $7.56 and diesel approaching $8 as retailers brace for further increases.

Clifford O’Brian, operator of a Shell service station in Exuma, said the latest prices represent the highest levels he can recall, although he expects motorists will continue buying fuel because of their dependence on it.

“Like I say, government controls it,” Mr O’Brian said. “So we can’t change it until they say. So Esso say they going up. If they go up, most likely everybody’s going up.”

Gasoline at Mr O’Brian’s station is selling for $7.56 per gallon, while diesel is around $7.96. “I think this is the highest it’s been,” he said.

His comments come after Esso dealers were notified of another increase that was expected to push gasoline prices to as much as $7.50 per gallon, up from $7.06, with uncertainty initially surrounding whether Shell and Rubis would follow and when.

The latest increases come as dealers continue to contend with rising operating costs while earning a fixed per-gallon margin. The Government increased gasoline dealer margins from 54 cents to 79 cents per gallon in 2024, while the diesel margin was increased to 50 cents.

Mr O’Brian said higher pump prices could result in some decline in sales volumes, but he does not expect demand for fuel to disappear. “Folks need gas,” he said. “They might sell a little less, but folks still going to buy it because they need it.

“The sales may go down a bit because you’re going to get less gas, but folks, they need it. So if you need it, you got to purchase it.” The Exuma petroleum dealer said the higher price ultimately means consumers have to find more money to maintain the same level of fuel consumption.

“They just dig deep in your pockets,” Mr O’Brian said. However, he added that the increase in the retail price does not translate into a corresponding increase in the amount dealers earn per gallon.

“You see, but the thing it is, the margin doesn’t change,” he said. “Don’t care what they put the price to it doesn’t affect your bottom line. Now, some folks may say it’s going to affect us and they may decide that one or two people go but, hey, their margin doesn’t change.”

Veronica Moore, another fuel retailer, said the impact of higher prices extends beyond consumers because dealers must find additional cash upfront to purchase their fuel supplies.

“I’m sure it was $7.56 or something like that,” Ms Moore said recalling the price of gas at her station. “But definitely there was an increase..

“We have to find more money upfront to pay for fuel. You have to pay for fuel upfront, so it definitely has an impact on our businesses, on all gas station businesses, when there’s an increase, and especially at these high rates, of course.”

Ms Moore said, however, that she does not currently anticipate changes to staffing or operating hours as a direct result of the latest increase. “For now, yes,” she said. “We don’t see anything at this point. We have to wait and see how this pans out.” 

Her comments echo warnings previously made by other petroleum dealers that sustained increases in fuel prices could eventually force some operators to reconsider 24-hour service, staffing levels and other operating costs.

Peter Roker, operator of Roker’s Gas Station, previously warned that rising fuel prices could affect employment and hours of operation because dealers’ fixed costs, including salaries, rent and electricity, do not decline as the price of gasoline increases.

The latest price pressures have also renewed calls for Government intervention, particularly through adjustments to the taxes imposed on fuel. Ms Moore said dealers have little ability to absorb further increases because their own expenses remain high, while suggesting that Government could provide relief by reducing VAT and its ad vaolrem tax on fuel.

“The price of fuel is set by government,” she said. “We have no control over how that moves. So that’s totally up to the Government to decide whether we can improve what we make, as it is now.

“We’re at 76 cents, and the Government has a tax on the fuel,” she said. “So it’d be good if they could consider the public and decide to take a cut on the tax that is derived from fuel. That could very well help people, but we definitely cannot reduce our margin. Our expenses are very high. So there’s nothing we can do at this point.” 

Ms Moore said any reduction in the Government’s fuel tax could provide relief to motorists facing increasingly expensive fuel bills. “And so I think if the Government wants to consider, then that’s totally up to them,” she said. “I’m sure the public would be happy with that.” 

Meanwhile, Rodney Eve, operator of a Rubis station in Nassau, said he had not yet received notification of a new increase when contacted. “We had something Friday past,” he said. “That was the latest.”