The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A major Bahamian fuel provider yesterday said rising global oil prices, driven by increased economic activity as the world emerges from the COVID-19 lockdown, has driven its gasoline prices back to almost $4 per gallon.

Valentino Hanna, general manager of Sol Petroleum (Bahamas), the Esso supplier, explained why its advertised price was lower than what consumers are seeing on the pump. “Yes, effective 4 June, 2020, our VAT inclusive price for premium unleaded was $3.80 per gallon,” he said. “That was after having a price of $3.28 from 22 April, 2020, for almost six weeks. We also were the first to drop below $3.30 per gallon.”

“The price that all of the wholesalers purchase fuel for is tied to national postings such as US Atlantic Coast, US Midwest, US Gulf Coast, etc. The postings are subject to fluctuations based on supply and demand.”

Market indicators show that crude oil prices are still trading below $40 per barrel, having risen in recent weeks. Analysts expect gas prices to continue to rise as people come out of the COVID-19 lockdowns worldwide.

Mr Hanna added: “When we went into COVID-19 lockdowns, economic activity was curtailed and demand for fuel dropped. Consequently, the supply price of fuel dropped. As various countries have re-opened and others, like ours, are beginning to, the demand for fuel has increased. With the increase in demand there will be a corresponding increase in the supply price.”

“The increase in our price is based on the fact that the last time we imported fuel, we purchased it at a higher price than the time before. The price of all competitors, generally, will follow suit as soon as they import new product assuming that the postings continue to rise. We just happened to be first.”

Calls to Rubis (Bahamas) and FOCOL Holdings (Shell) were not returned yesterday.