By NATARIO McKENZIE

Tribune Business

Reporter

nmckenzie@tribunemedia.net

Any profits that liquefied petroleum  gas (LPG) dealers made from the fall in global prices has been “taken back” by the Government via increased taxes, Tribune Business was told yesterday

Tennyson Wells, the ex-Cabinet minister and a major shareholder in Caribbean Gas, said that while the price of propane (cooking gas) has gone down, tax increases have effectively eliminated those savings for dealers.

“While I’m not as involved in the day-to-day aspects of the industry as I used to be, my position would be the same,” Mr Wells said.

“The Government doubled the duty on it in the last year and they added 7.5 per cent VAT. Anything that the importers or distributors may have gained in terms of the price going down, the Government took it back.

“I haven’t done any numbers on it but I think that if people look at it objectively they would see that the gas dealers would have difficulty making ends meet with all the different costs, the cost of living etc. Based on what I know, they increased the duty from $0.20 to $0.40, and then you pay VAT on top of everything I don’t see how they could survive.”

The Price Control Commission last week announced a reduction in the maximum retail price for 100 pound LPG cylinders by up to 16.3 per cent.

Tribune Business reported back in February that the Government was considering reducing the cost of price-controlled cooking gas. 

At that point, there had been a 67 per cent fall in spot LPG prices on the world and US markets. Based on the Mont Belvieu index, LPG per gallon prices had fallen from $1.695 on February 10, 2014, to $0.56 per gallon at the same time in 2015.

The VAT inclusive price for a 100 pound LPG cylinder on New Providence and Grand Bahama is now dropping by 16.3 per cent - from $107.5 to $90. That is a $17.5 savings, and on the Family Islands the price is being cut from $118.25 to $100 - a drop of 15.4 per cent.

Price Commission Chairman, E.J Bowe, said last week that to ensure Bahamian LPG prices were better aligned with those on the world market, they would be reviewed more frequently.

He added that the LPG dealers’ only concern with the reduction had been the potential impact on their margins.

“We believe we were fair to the dealers and the consumers,” he added. “We struck the right balance.”

The wholesale LPG price for a 100 pound cylinder drops to $60 in New Providence and Grand Bahama, and $70 on the Family Islands.

    By the gallon, LPG retail prices are $3.81 in New Providence and Grand Bahama, and $4.24 in the Family Islands. The supplier/wholesale prices are $2.52 per gallon on New Providence and Grand Bahama, and $2.97 per gallon in the Family Islands.