The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Petroleum dealers are calling for greater consultation with the Government over proposals to cap the amount of VAT it earns per gallon sold and mitigate the impact of rising energy prices for consumers.

Vasco Bastian, the Bahamas Petroleum Dealers Association’s (BPDA) vice-president, told Tribune Business that they wanted to at least discuss the matter with the Davis administration rather than see it outright reject any policy action.

He was responding to comments made by Michael Halkitis, minister for economic affairs, who said the Government would not be reducing VAT on gasoline to combat soaring oil prices. “I’d be very disappointed in the minister for economic affairs if he takes that approach. I think before he made that statement he should have sat with the dealers in the industry and discussed this, and come to some suitable, reasonable alternative,” Mr Bastian added.

“We should at least have a dialogue. I know the minister to be a good person, separate and apart from his politics. I know him to be a good person, and if he said that I would be very disappointed in the minister, and I’ll tell the minister that to his face and not behind his back to don’t do that. Let’s sit down like intelligent men and women and have a conversation.”

Mr Bastian previously told Tribune Business that if gasoline prices rose to over $6 per gallon, many dealers would have to cut back on the amount they purchase from wholesalers and go to self-service at the pump for several days per week.

Ken Hutton, the Abaco Chamber of Commerce president, has also told this newspaper that the Government should consider “capping” the amount of VAT it earns per gallon, a move that would follow Barbados which has reduce its own taxes on gasoline in the midst of oil price volatility.

Mr Halkitis, though, said that since oil prices have dropped from their recent highs it would not have been a wise move to reduce VAT on gasoline. Mr Bastian said: “The minister knows quite well, and he is trained in economics, and he knows that oil going back down under $100 per barrel is a temporary position and we need to address the bigger issue. A barrel of oil went down before and then we went back to where we were.

“He can strip the price of gasoline at the pump down, and he could ask himself who gets the majority of this. He would see it is not the dealers. This has been like this for a number of years. He needs to adjust this so everybody can be happy and the minister knows better.”

The Government gets $1.54 for every gallon of gasoline sold, while dealers earn 54 cents and wholesalers collect only 33 cents.