By YOURI KEMP
Tribune Business Reporter
The Prime Minister’s spokesperson says the Government is still trying to find a formula that brings the relief demanded by gas station operators but without inflicting more financial pain on already-struggling consumers.
Clint Watson said described negotiations with the Bahamas Petroleum Retailers Association as “a balancing act”, given that the 50 percent per gallon of gas margin increase sought by dealers would further increase already-high costs for consumers.
“We have to find a way to ensure that everybody is able to survive,” he explained. “It’s a balancing act, and so those are the questions we continue to find. What can you do for the retailers and petroleum dealers that you may be able to bring some level of relief to them, without them having to raise costs, so they can still do business in the country and be successful at it? But yet consumers can still be able to afford to go to the pumps and fill up their cars.”
Petroleum dealers have been seeking a revamp of their price-controlled, fixed-margin model which makes the industry purely a volume-driven business. With higher oil prices increasing the sums they have to pay the three major oil companies for their fuel inventory, gas station operators say their gross margins are now to low to cover rents, employee payroll, and rising bank (overdraft and credit card) charges. As a result, some may be forced out of business.
However, Senator Michael Halkitis, minister of economic affairs, has rejected the idea of a margin increase due to fears about the impact higher prices will have on consumers. While global oil prices have fallen slightly, they remain relatively high, standing at $95.08 per barrel on the West Texas Intermediate indice and at $103.8 for Brent crude.
Some have argued that the Government is merely trying to prolong talks with the retailers, and is effectively using the negotiations as a stalling tactic, in the hope that global oil price volatility will ease sufficiently - and the war between Russia and Ukraine end - so that the pressure on Bahamian gas retailers eases.
Mr Watson rejected this, and said: “You can talk to the petroleum dealers yourself and they would tell you that the meetings were productive. The Government is working on their behalf. People will say anything, but at the end of the day the proof to what people say will be the results that we deliver on.
“So it’s still negotiating, and while I’m happy they are negotiating, you’re seeing at some locations certain relief and I encourage the consumers look out when you hear some dealers and distributors who are giving relief on gas and taking a bite.
“It depends. Different stations are doing it for different shipments. Shop around and get those deals that are going around, and what you are seeing happening is people are trying to find ways to make it work without saying: ‘Too bad, let’s just increase it.’ And those discussions continue. While they’re continuing talks are also happening to find relief.”