Gas prices at the three major retailers on New Providence are either at or exceed $7 per gallon.
As of yesterday, gas prices in New Providence were $6.97 at Shell, $6.98 at Rubis and $7.39 at Esso.
Gas prices in The Bahamas have continued to climb for the last four months. The surge in the price of gas per gallon has largely been attributed to Russia’s invasion of Ukraine on February 24.
Before Russia’s attack, gas prices ranged from $5.16 to $5.37.
That gas prices are at historic highs is not the fault of the current administration.
But the position of the current administration to apparently wait and see what happens as critical industries teeter on the verge of financial ruin is not acceptable.
Bahamas Petroleum Retailers Association Vice President Vasco Bastian has said the situation is not sustainable.
Gas retailers have a set margin of profit from each gallon of gas.
No matter what the price of a gallon of gas, retail operators will take home 54 cents and the petroleum wholesalers will take home 34 cents.
However, as gas prices rise, government collects more revenue from the 10 percent VAT charge on wholesale and retail fuel.
To put it simply, the government is pocketing more money as gas prices rise, but those who sell the gas are not.
According to the most recent data provided by The Central Bank of The Bahamas, the country’s overall spend on fuel increased by more than 30 percent in the first quarter of 2022.
Acting Prime Minister Chester Cooper yesterday warned Bahamians that for the foreseeable future gas prices will remain high and urged consumers to conserve energy.
That is welcome advice for many, but for those who are in the transportation industry, it is no comfort at all.
Petroleum retailers are paying more for the same amount of gas but making the same margin from which salaries and other expenses have to be paid.
As the price of gas rises, they are also recording significant increases in revenue, which means they will pay higher business license fees.
The government has so far neither agreed to increase the gas profit margin, allow the retailers to retain some of the VAT or amend the structure of their business license fees.
It is not sustainable.
Meantime, public bus operators, who help many thousands get to work and school, are paying more for diesel.
Yet, the government has not raised public bus rates in order for the operators to offset the increased cost of fuel.
Taxi drivers are in a similar situation.
Fuel costs have dramatically increased, but fares are price controlled by the government.
With taxi drivers shelling out more and more to transport passengers significant distances, no one should be surprised when many drivers charge whatever they feel will make ends meet as opposed to what is publicly stated.
This is bad for the taxi business, and even worse for tourism.
Not only will many find the cost of services not as advertised, but there have been many reports on travel websites of taxi drivers offering other “services” that are not allowed in law, and could land some drivers and tourists in front of a magistrate.
More than one taxi driver we asked about this replied, “If they’re not making any money on the legal tariff, what do you expect them to do?”
Tour operators are also in a precarious position.
They often sell packaged tours ahead of time at a specific cost.
To have to eat the cost or increase the cost without warning could hurt the operators and our tourism product.
Minister of Economic Affairs Michael Halkitis indicated last month that the government does not intend to increase the margin for gas station operators.
He said the government planned to look at other areas to provide relief.
However, the relief is yet to come.
While we understand that Financial Secretary Simon Wilson met with petroleum retailers last week, we have yet to hear what measures will be put in place to help those whose industry hinges on the price of fuel.
We have also not heard anything definite coming from Cabinet in terms of increasing bus and taxi fares or some creative mechanism to have them remain what they are to protect consumers but allow industry stakeholders to extract more from each dollar.
It is not a simple solution, but as Prime Minister Philip Davis said, his administration was elected to solve big problems.
The fuel crisis would certainly qualify.