NASSAU, The Bahamas--Last week, Minister of Economic Affairs Michael Halkitis assured that government is still working with the Bahamas Petroleum Retailers Association (BPRA) to come to an agreement on appropriate margins on fuel products, which are price-controlled.
“It’s a difficult situation,” said Halkitis during an Office of the Prime Minister press briefing.
“We understand the plight of the retailers. The conditions that they have to operate under, including rents and franchise fees and those sorts of things, it makes it difficult for them.”
Halkitis indicated that a new idea was proposed recently that government is considering. Though he did not reveal any specifics, he said there may be a need to look at the pricing structure more broadly, starting at the wholesale level.
“We had a brief conversation where an additional idea was sort of floated,” Halkitis said. “We have to sort of hash it out. As I’ve said before, our position is…the immediate effect of a margin increase would be higher prices at the pump, which would affect every single person in this room and everyone who owns a car. Government doesn’t want to be the cause of that just by something that we did.
“And so, we continue the conversation. We ask them for forbearance. We continue to meet. We understand their plight. We’re not unsympathetic, but we just believe that it would be counterproductive to go with a margin increase at this time.
“There was some other issue that I can’t talk about now, but that’s a suggestion that was made. We have to process it. And so, we continue to look for ways you can bring relief. It might be we have to just look at this issue of how we price from the wholesale level straight down to the retail level.”
Government controls the amount of profit fuel retailers and wholesalers can earn on a gallon of gas or diesel. As it stands now, retailers earn $0.54 per gallon on gasoline, and $0.34 per gallon on diesel. They have repeatedly expressed concern that these margins are not sufficient to cover expenses, as sustained high fuel prices have meant significant decreases to potential profits.
Since early last year, the BPRA and government, which makes $1.16 per gallon on all fuel sales before VAT, have been in a back and forth over this issue.
“We are looking at ways and, hopefully, we will come and tell you about some changes in the way we do things,” Halkitis said last week.
“But I think we just need to look at this whole system that I’m talking about. I can’t say more than that right now; but unfortunately, for the time being, we are at the mercy of the international fluctuations in price.” ~ The Nassau Guardian ~
