Wednesday, Aug 21, 2019
HomeNewsPetroleum retailers pushing for marginal price increase

Petroleum retailers pushing for marginal price increase

Saying that the petroleum retail industry is in a”crisis”, the Bahamas Petroleum Retailers Association(BPRA)is pushing the government for a marginal increase-a move the would ultimately drive the cost of fuel higher.

“Our request is for an increase of seven percent on the cost of each product, diesel and gasoline,”said a statement from the association that was released to the press yesterday.”This will allow us to earn a gross profit of$0.11 on the dollar for diesel and$0.16 for gasoline. Currently the gross profit margin on diesel is$0.04 on the dollar and$0.09 on the dollar for gas.

The association said the increases equate to$0.28 and$0.30 on diesel and gasoline respectively.

“The petroleum retail Industry is in trouble. We are in trouble because the gross profit received from the sale of diesel and gasoline is very low.”

The association explained that a the petroleum industry operates on a fixed margin which is set and controlled by the government.

However, BPRA added that the margin does not change when the cost of petroleum products change.

“This means we currently earn a gross profit of four cents on the dollar for diesel and a gross profit of nine cents on the dollar for gasoline. Our industry cannot survive when we spend$1,000 to buy diesel and earn only$40 or when we spend$1,000 to buy gasoline and earn only$90,”the association said.

BPRA said with the earnings of$40 and$90 respectively retailers must pay all operating costs including electricity, salaries, rents, licensing fees and security costs.

But the association said it’s becoming increasingly difficult to do so.

According to the association, the pricing structure on diesel has not changed in 30 years and on gasoline in nine years.

The association said the retailers”provide an essential service and seek a fair opportunity to survive.”

The government is expected to meet with the association sometime this week.

Prime Minister Hubert Ingraham said the measures that the government has in place are for the protection of the consumers.

He said the price of oil is always fluctuating, adding that sometimes retailers will make more money in one month than they would in another.

However, he added that if the retailers had a fair case, the government would give consideration to their petition.

FOLLOW US ON:
Budget Saturday Marc
Cartwright: Food imp