The Tribune

By FAY SIMMONS

TRIBUNE Business Reporter

jsimmons@tribunemedia.net

A PETROLEUM retailer yesterday warned there is no clear sign gas prices will fall from their present $7 per gallon before year-end due to continued oil market volatility as the Middle East conflict rumbles on. volatile global oil markets could keep prices unpredictable through the final quarter of the year.

Vasco Bastian, vice-president of the Bahamas Petroleum Retailers Association (BPRA), said gasoline prices are holding near the $7 mark and and the industry has no clear indication they will ease soon due to unpredictable external events.

Speaking to Tribune Business, Mr Bastian said while he is hopeful that motorists will enjoy some relief before the Christmas holidays, it is unclear if Iran-US tensions will be resolved before that time. 

“Everything going on with these oil prices in The Bahamas is solely based on what’s going on in the United States of America in regards to that whole war and that Strait [of Hormuz]; whether it’s opening back up or not opening back up, allowing ships to come through,” he said. “That has a direct correlation on how our prices are going to be in The Bahamas, especially into this last quarter of the year.”

Mr Bastian’s comments come as US motorists face record-high Labour Day gasoline prices, with the national average reaching about $4.14 per gallon amid continued disruption to global energy markets from reduced oil tanker traffic through the Strait of Hormuz.

He added that the volatility in international markets has made it difficult to predict the direction of prices locally. “It’s been very volatile. I pray to God that this can just level off,” Mr Bastian said.

“But, for now, it just seems like one minute it starts trending downwards, and then it goes back up, and it’s just so unpredictable at this point. I wish the prices could really go down, to be honest.”

Mr Bastian explained that higher fuel prices also put pressure on retailers because dealers must purchase their fuel at elevated wholesale prices from Rubis, Esso and Shell (FOCOL Holdings) before selling it to consumers.

“We don’t like when prices are high. When prices are high, dealers are stressed, stressed and stretched,” said Mr Bastian. He also pointed to the increase in the regulated retail margin approved by the Government in 2024, adding that this has been critical to keeping retailers operating as their costs increased.

“We got our margin increase in October 2024,” he said.  “And so October of this year will be two years since we got our increase. We went from 54 cents, and we got the 25 cents inclusive of that. So basically, it was like 23 cents, 24 cents. So we’re up now to like 77 cents.”

The Government approved a 25 cent per gallon increase for gasoline retailers in September 2024 after dealers complained that the existing fixed margin was no longer sufficient to cover rising operating costs. The last increase had been approved in 2011, taking the gasoline margin from 44 cents to 54 cents per gallon.

Mr Bastian said without the increase, some retailers may not have been able to remain in business. “If we hadn’t gotten that increase, I tell you no lie, these stations would have been shut down, shut down. No if’s or but’s about that,” he added. “You might have had one or two that might have been able to ride it out because of their facility with the bank and that stuff like that.”

Mr Bastian said retailers are continuing to closely manage their expenses as they wait to see where fuel prices go next. “I tell you, I say it again: Thank God we got our margin increase when we got our margin increase, because if we hadn’t, we would have been - this would have been crazy,” he said. “No telling where we would have been right now in this business, in this industry.”

Mr Bastian stressed, however, that consumers should not be concerned about a potential gasoline shortage, noting wholesalers and retailers have taken steps to maintain supplies.

“I want to tell the Bahamian people to rest assured there will never be a gas shortage in this country because all of the major wholesalers have added inventory, and the dealers continue to work with the wholesalers to make sure that we all have gasoline at our various gas stations when they come to get service,” said Mr Bastian.

He added that retailers will continue to monitor international developments, particularly the situation affecting oil shipments, and could seek further discussions if prices rise significantly. “Hopefully, it doesn’t go any higher than this,” said Mr Bastian. “But, if it does, we’ll look to sit down and start talking again on how we can deal with this assessment.”