• Predicts ‘no adverse impact’ for motorists
• Gas station operators now ‘at our wits end’
• Willing to accept phased-in margin rises
By NEIL HARTNELL
Tribune Business Editor
FOCOL’s chairman yesterday said he is “more confident” than ever before that the push by Bahamian petroleum retailers for increased margins can be resolved “without adversely impacting the motoring public”.
Sir Franklyn Wilson, speaking as the BISX-listed petroleum products supplier and its competitors were yesterday submitting their thoughts on the issue to the Government, again reiterated to Tribune Business his belief that the Bahamas Petroleum Retailers Association and its members have made “a credible case” for a margin rise.
However, he added that there was “a lot to suggest” that the present price-controlled fixed margin “works” to some extent, and said there was nothing to prevent either the three oil companies - Esso, Rubis and Shell (FOCOL) - from seeking to seize market share by discounting and other commercial tactics.
Asserting that “people find a way”, as such practices have been employed in the past, Sir Franklyn told this newspaper: “The position is that the oil companies will respond to the Government in a way that they each deem appropriate. I think today was when the letter was supposed to go in. FOCOL is sending a reply, and I believe the others will be as well.
“I have no doubt that the matter can be concluded without an adverse impact on the motoring public. I am more confident today than the last time I spoke to you. It’s not a crisis. It’s a desire that is creditable and reasonable, but it is not a crisis. This does not constitute a national crisis. Dorian was a crisis, Matthew was a crisis, COVID was a crisis. Everything is relative. I am absolutely convinced [this will be resolved] because it’s not a crisis.”
FOCOL and its fellow wholesalers had previously been asked by the Government to review “some options and ideas” that were discussed previously between the parties, and respond “within a few days” with their position to the Davis administration, amid retailers’ complaints about how their survival and profitability are being squeezed by inflexible price-controlled margins that are insufficient to cover ever-escalating operational costs.
The Davis administration has engaged with the three oil major wholesalers as part of its promised strategy to review the industry’s costs and pricing at every level as it bids to square its ‘no increase in pump prices’ stance with gas station operators’ demands for relief via higher margins.
Sir Franklyn told Tribune Business that solving such disputes in a democratic system often became “messy” because all parties aired their respective viewpoints publicly and often never entirely see eye-to-eye when such issues are sorted. “Because democracy is messy, the pathway to resolving differences differs, but you find a solution,” he added. “It’s messy, it’s uncomfortable but life goes on.”
Asked whether it was time to reform the petroleum industry’s fixed price-controlled margins, and switch to another system, Sir Franklyn replied that while it may not entirely be consistent with free enterprise “the fact of the matter is that it’s been in place a long time. There’s a lot to suggest it works. Every so often problems develop when circumstances lead one party or another to do it.
“Despite the case the Association is making, there are individual wholesalers, individual retailers who seek to change all their market share by discounting. People find a way. All I’m saying to you is it’s just a matter of record that, while it’s a time when the Association is making a case for margin and price increases, and while I’m on record saying it’s a credible case, the fact of the matter is there are people discounting.”
Meanwhile, Vasco Bastian, the Bahamas Petroleum Retailers Association’s (BPRA) vice-president, told Tribune Business that its gas station operator members are “at our wits end” over the inflexible 54 cent and 34 cent gasoline and diesel margins, respectively, that are no longer sufficient to cover a multitude of ever-increasing operating costs (see other article on Page 1B).
Suggesting that retailers will be receptive to a margin increase that is phased in, he said: “We are waiting patiently for the Government to respond and I hope they come back to us with something very favourable that we can all live with. We wait in limbo for the Government to get back to us, we hope with something positive. We’re willing to work with the Government on a phased-in approach with smaller margin increases.
“Something has to break. We’ve been very patient. We understand the challenges the Government faces in not wanting to pass the increased cost on to the consumer, but every other cost is being passed on to the consumer. We cannot absorb it any more. There’s nothing more we can do. We’re in a heavily regulated, fixed margin price-controlled industry. What else can we do? What else can we do?
“We’ve been very very patient with this government, and we applaud them for whatever they’re going to do. Let’s make a decision on what we need to do, and push past this last step while the price of oil is relatively low. Now’s the time to do it. We cannot wait until it’s summer when the price of crude oil will shoot back up. It’s a very difficult position for us all, but has to be done for the survival of the industry. We’re not asking for an astronomical amount.”
Mr Bastian said the retailers presented the Government with three different options for resolving their plight when they met with Prime Minister Philip Davis KC two weeks ago yesterday, and added: “We are united in our cause. We need to survive. All options are on the table in regards to our future. We’re not leaving anything off the table.
“This is the most united that the association has been in 20 years. We’re ready and prepared. We want to work with the Government. The Government has been trying to work with us, and we want to try and work with the Government. We want to work with this government to try and bring some relief to the issue. We cannot absorb anything else. We are at our wits end. We want to get this issue behind us. It’s been 15 months....
“We just want the Government to come to our aid, take a hard look at everything and do what is right and move forward. At a stroke of a pen the Prime Minister, minister Halkitis and his colleagues can give us relief. This all goes away. We can go back to what needs to be done, working in our business, feeding our families, keep people employed, buy from the vendors we buy from, pay NIB, Business Licence fee and electricity bill.”