The Bahamas is currently going through a complex situation economically and there are many subplots to go with it. Two of those subplots involve the petroleum dealers and National Insurance Board (NIB). Petroleum dealers are requesting and in fact demanding an adjustment to the margin on gas as it has been price controlled for many years. The Minister for National Insurance is issuing warnings about the funds’ viability. Some difficult decisions have to be made.
This situation with the petroleum dealers is quite unusual in what is considered a somewhat free market. Normally, the government in non-Communist countries does not dictate prices and margins but in this case that is what is happening. Essentially, the government for many years has intervened and prevented free market forces from determining prices and sought to ensure that a cap is placed on margins to help in accomplishing this. At the same time, the government has placed a tax on gas that is greater than the profit margin of the petroleum dealers. So, the government gets its money, which they have determined themselves up front, tells the dealers how much they can make, and has postponed margin increases to keep gas prices down. The dealers have no choice or options; they have to learn to live with what has been mandated.
The real issue with gas prices is the taxes which keep the prices high. Whatever the current price is, the taxes add approximately $1.60 or possibly more to the price. Petroleum dealers have struggled and become creative in surviving and generating profits by using the convenience stores they house as the main revenue generator to supplement what is lost on the gas margins. In the meantime, the 54 cents fixed margin for gas is declining due to inflation, increased salaries and costs and other factors. Something needs to be done – but the public outcries about the cost of living is delaying the inevitable. If the situation continues, either petroleum dealers will have to reduce services and staff or go out of business. A very difficult and complex issue.
The government is in a quandary because they know how business works but they also know the power of public opinion. Eventually, a decision will have to be made, and I believe the best way to make what may be a painful decision is to determine what is fair and reasonable and operate in that vein. The Bible tells us to do unto others as we would have them to unto us. We have to put ourselves in the position of both the consumer and the dealer and ask: What would I do if I were in their position? The question is what is fair and I will stay tuned to see what the answer is.
The second difficult decision is another economic matter that will surely not go away. According to reports from the minister responsible for National Insurance, the fund is losing money and will become insolvent in less than a decade if not addressed. It is obviously a bad time to hear of any form of tax increase, but at the same time, the danger of a diminishing and possibly insolvent fund is more nefarious than a rate increase.
In the same vein as the petroleum dealers’ issue, at some point in time a decision has to be made. In politics, public sentiment is powerful, but I believe the best way to deal with public sentiment is to clearly lay out the details to the public and give an opportunity for discourse. I believe when the public has the facts, and has an opportunity to learn what the options are, they will support what is best for the country even if it may involve some personal discomfort. The Bible tells us to pray for all in authority and for believers this is our first duty. Pray and ask God to give our leaders wisdom, so that at the end of the day, they would do what is fair and right and what will put us in the best position to succeed as a nation. My personal prayer is that God will guide our leaders and that the difficult issues will be addressed expeditiously rather than postponed. If there is something we have to do, then let us do it expeditiously and responsibly.
• Pastor Dave Burrows is senior pastor at Bahamas Faith Ministries International. Feel free to email comments, whether you agree or disagree, to pastordaveburrows@hotmail.com. I appreciate your input and dialogue. We become better when we discuss, examine and exchange.
