Gas prices continue upward trajectory
Government has given the green light for gasoline prices to break the $5 mark, according to the gazetted price schedules of the Price Control (Gasoline & Diesel Oil) Amendment Regulations published on Monday. One gas provider in the gazetted fuel price sheet is proposing a possible increase to $5.22 at the top end.
There is no guarantee that gasoline prices could reach that ceiling very soon, but if gasoline providers have asked the government for the increase, it is likely prices will continue to trend in that direction for a while.
Gasoline prices have increased 7.4 percent year-on-year, according to The Central Bank of the Bahamas’ (CBOB) Monthly Economic and Financial Developments (MEFD) report for April 2018. The report stated that oil prices have a sustained an “upward trajectory”.
The report added that diesel prices increased by 13.8 percent to $4.37, with both diesel and gasoline prices increasing 3.8 percent month-on-month between March and April. Gasoline prices landed at $4.52 in April.
The MEFD report explained that on the global market, crude oil prices increased in April by 7.0 percent to $75.17 per barrel, which is the highest the prices have been since November 2014, “reflecting in part the major producers’ efforts to limit supply”.
“At the end of April, average OPEC production stood at 31.96 million barrels per day, a decline of 201,000 barrels per day over the prior month (March),” the MEFD report notes.
After the Haitian government announced sharp increases in gasoline prices recently, civil unrest erupted in Port-au-Prince and Cap-Haitien. Demonstrators used burning tires and barricades to block major streets, and as of last Friday, at least three people were killed.
The continued upward trend in global oil prices comes as the Bahamas government announced during its budget presentation a decrease in the tariff for electric vehicles and solar kits.
The cost of energy in The Bahamas is already one of the highest in the region, and recently announced changes to certain internal processes and upcoming investments at Bahamas Power and Light (BPL) mean energy costs will likely not decrease soon, according to BPL executives.
And with government proposing a value-added tax (VAT) increase from 7.5 percent to 12 percent, there is concern that energy prices will increase to detrimental levels.
However, government attempted to allay that fear in its budget by proposing to exempt VAT from customers’ electricity bills that are less than $200. It also announced that it would exempt VAT from Water and Sewerage Corporation customers whose bills are less than $50.