Gas stations cut diesel supply
The Bahamas Petroleum Retailers Association(BPRA)yesterday placed a ban on the sale of diesel for several hours a measure taken to demonstrate to the government how serious it is about agitating for amarginal profit increase.
The petroleum industry operates on fixed margins controlled by the government.
Diesel retailers initially planned not to sell diesel for a full day. However, most gas stations began to sell the fuel again at noon yesterday. This move came after Minister of State for the Environment Phenton Neymour agreed to meet with the association to discuss its concerns.
The BPRA also met with the government earlier this week. According to Neymour, the government has requested additional information from the retailers.
The margin increase would increase the cost of fuel. The association wants the government to allow retailers to earn a gross profit of$0.10 on the dollar for diesel and$0.15 for gasoline. Currently, the gross profit margin on diesel is$0.04 on the dollar and$0.09 on the dollar for gas.
“The price of diesel has gone from a$1 something in the 70s to close to$5 now,”said chairman of the Retailers Margin Relief Association Oswald Moore.”In all that increase, the retailers have gotten zero in profit increases. So that means when we sell the product, we are selling it at a loss. We want to increase it to make a profit.”
He said the retailers have the same problem with gas prices.
Moore said the industry cannot survive, as retailers spend$1,000 to buy diesel and earn only$40; or$1,000 to buy gasoline and earn only$90.
He said the retailers decided to place a ban on the sale of diesel to bring attention to their plight.
Neymour said he was surprised by the decision taken by retailers.
“The government has received preliminary information from retailers and I made a request for additional information, some of which has been given,” he said.
“They decided to take action this morning. I consider it to be drastic…given the fact that we’ve only been given short notice and there has to be a proper review.”
Neymour said when the government looks at the margin for retailers it has to take into considerations the margin for wholesalers and the effect it would have on consumers.
“So it is not a simple process. So there has to be a complete review and consultation with all of the stakeholders. The government does recognize that some expenses have increased. We recognize that, but at the same time it has to be a thorough process,”he added.
Neymour said final approval for a margin increase would ultimately have to be made by Cabinet.
Latest posts by The Nassau Guardian (see all)
- The Caribbean and climate change: evil in paradise? - September 21, 2019
- Patrice Murrell, Benje release new singles - September 20, 2019
- Atlantis gets ready to kick off highly anticipated ‘Eat’ event - September 20, 2019