The Tribune

EDITOR, The Tribune.

BAHAMIANS are anxiously awaiting the Progressive Liberal Party government’s proposal for the Bahamas Petroleum Retailers Association in the wake of that group of gas station operators badgering for a long overdue margin change. The average price of gas is about $5.65 per gallon. In an earlier missive to The Nassau Guardian, I suggested that the Davis government subtract 20 cents from its $1.72 it collects for each gallon of gasoline, which would up the gas station operators’ profit margin to 74 cents, instead of the 54 cents they currently collect.

One concerned individual recently told me that he heard rumours that one of the proposals the government is considering is asking gas wholesalers to take a profit margin cut to facilitate the price increase for retailers.

Now, this is only a rumour. Yet if true, it would be unconscionable for the government to expect wholesalers, who are already only collecting 34 cents a gallon, to make the financial sacrifice for gas retailers, while the government gets off Scott free. At only 34 cents per gallon, I cannot imagine how the government would expect wholesalers to continue operating if they’re forced to take a profit margin cut. Wholesalers have no wiggle room for the government to negotiate such a proposal.

The government cannot expect wholesalers to collect under 30 cents a gallon, while it continues to collect $1.72. In order to appreciate just how unfair such a proposal would be, imagine an Esso or RUBiS or FOCOL Sun Oil spending $3,560,000 for one million gallons of gasoline, while only gaining $340,000 after selling that amount to the retailers, who would collectively make a profit of $540,000.

Under such a scenario, BPRA members would earn $200,000 more than FOCOL, ESSO and RUBiS. Bear in mind that the government’s $1.72 per gallon portion amounts to $1,720,000 for every one million gallons of gasoline the wholesalers sell to the gas station retailers. That’s $1,380,000 more than the wholesalers who purchase, store and distribute the fuel in a safe and efficient manner.

It is the wholesalers who spend millions in the building and maintenance of their storage tanks and fuel lines, while paying exorbitant licensing fees to the government, in addition to other costs, such as salaries, NIB contributions, security fees, fuel inspection fees, fuel tanker licensing and insurance and utilities fees.

It can be rightly argued that wholesalers have much higher overhead costs than BPRA members. The government, who does absolutely nothing, other than collect $1,720,000 for every one million gallons of gasoline sold, should be the one to bear the financial loss in whatever proposal it puts forward, not the wholesalers.

KEVIN EVANS

Freeport,

Grand Bahama.

March 22, 2023.