Bahamas Government considering options’ to address high fuel prices
The government is considering several options, including adjusting taxes and business license fees for petroleum retailers who have complained about losing money due to the recent spike in oil prices, Financial Secretary Simon Wilson said.
“Everything is on the table,” said Wilson at a briefing at the Office of the Prime Minister on Thursday.
“There is no easy solution, and that’s one of the issues raised by retailers … in terms of some tax relief.
“It’s a fixed margin. So, what has happened is as fuel prices increase, their operating margin has now gone down in some cases to less than 10 per cent, their gross margin.
“They have employees, overhead, and so forth, so everything is on the table. We have to balance the need for them to have a return on the business in comparison to not impacting the public…
“This is an environment of higher fuel prices, so a balancing act needs to occur.”
Members of the Bahamas Petroleum Retailers Association (BPRA) met with Prime Minister Philip Davis, Minister of Economic Affairs Michael Halkitis and other senior government officials last week.
BPRA Vice President Vasco Bastian previously said that 90 per cent of the association’s more than 20 members wanted to strike as they are losing money due to high oil prices.
The strike never happened.
Gas prices per gallon are above $6. The government gets $1.72 (value-added tax and customs duty included), petroleum retailers $0.54 and wholesalers $0.34.
The retailers have called on the government to adjust the margins, something Wilson said the government is reviewing.
“You may be aware retailers operate with a fixed margin in terms of fuel, so they get 54 cents for every gallon of fuel sold, so high prices impact retailers very adversely,” he said.
“The prime minister undertook to look at the issue with the retailers. They are going to provide us with some more information in terms of what their options are, and hopefully, within one week or so, we will come and have the next meeting and finalise what type of support can be provided to the retailers without adversely impacting the public, the consumers of fuel.”
Wilson noted that one of the “solutions” put forward in the meeting was that “maybe the government should reconsider the position on margins” and adjust the base business license fee.
“There was no decision made in terms of what is the best option,” he said.
“The decision was the retailers would provide more information. We’ll come together back as a group after the holidays and determine what’s the best course of action.”
On Friday, Bastian said he’s “hopeful”.
“We felt rejuvenated,” he said.
“We felt hopeful that our concerns for many years were being acknowledged. The problem with this industry is for so many years, for more than 10, 15 years, we’ve been asking and trying to get some assistance and some guidance and to let our issues be known.
“The reason I am hopeful is that the leadership of this country saw fit to entertain us and to sit with us and to hear our cries and hear our concerns.”
Gas prices in New Providence are $6.19 at Rubis, $6.16 at Esso and $6.25 at Shell.
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