By KHRISNA RUSSELL

Tribune Chief Reporter

krussell@tribunemedia.net

THE cost of fuel at pumps has shot up to over $6 a gallon at two major providers, with Economic Affairs Minister Michael Halkitis saying the situation is “volatile” and out of the government’s control due to international market fluctuations sparked from Russia’s invasion of Ukraine.

With times being tough, Mr Halkitis said motorists need to conserve where possible.

Rubis’ fuel stations are highest among providers at $6.33 per gallon, value added tax inclusive, while Esso’s fuel costs $6.16. Shell’s cost per gallon is $5.50.

 Just last week, Rubis was $5.52 a gallon, Esso was $5.68 and Shell was $5.50.

 “It’s a very volatile situation that’s out of our control,” the minister told The Tribune yesterday when contacted for comment. “The latest spikes have resulted from what happened in Russia with the war in Ukraine and the disruptions in the Russian oil supply and in general the uncertainty that it causes, which causes prices to fluctuate.

 “So, we see prices have gotten as high, I think it’s $130 and down to under $100 (a barrel) and now back over $100. So, it is our hope that things stabilise and some of that uncertainty is removed and we see prices go back to a more normalised level. So, that is something we are watching and we’re actively watching that with the hope that things move to a more normalised position.”

 Asked whether the government was considering cutting the rate of taxation on fuel imports to help keep costs down as some places like Barbados have done, the minister said The Bahamas has a different tax structure.

 “As it pertains to other countries doing things with taxes on fuel you would note that for example in Barbados, they did do a reduction but as a counterpart to that they did things like put in place a COVID levy on individual income tax as well as surcharge on corporate tax and raised some other taxes,” he said. “So, whereas they lowered the tax on fuel, some types of fuel, they actually raised it on other types of fuel. For example, in Barbados they raised it on LNG and in Barbados they instituted a pandemic levy on income tax at a certain level and they implemented an additional corporate tax.

 “So, our position is different in that we don’t have income taxes. We don’t have corporate taxes that would allow us to raise those things and in reality, our taxes come from import duties as we don’t have income tax.”

 Mr Halkitis continued: “The other point I want to make is that the government of The Bahamas gets revenue from taxes and if we don’t get it from taxes we get it from borrowing and as you know we have had a significant run up in debt over the last few years and so we have to be very careful when we talk about affecting our revenue base because if our revenue goes down we have to make up the difference through borrowing.

 “So, in short, we just advise people to conserve as much as they possibly can. We know it’s a difficult time and we are observing the situation and volatility particularly coming out of the war and we are hopeful that that situation normalises and the prices of oil on the international market will go back to more normal levels.

 “From time to time we see these sorts of disruptions and volatility and hopefully this is short lived and we just ask people to bear with the situation and hopefully we move to a more normalised level.”

Earlier this month, Public Works Minister Alfred Sears said the government was concerned about the rise in gasoline prices at the pumps, adding some “extraordinary” measures will have to be considered and taken in response to an expected continued increase in fuel costs.

 Weeks later, nothing has been made public to align with Mr Sears’ position.

I n February Bahamian consumers and businesses were warned to brace for gasoline prices to hit $6 per gallon this month after the Ukraine crisis sent oil prices soaring to seven-year highs.

 In early March The Tribune reported that over a two-week period, motorists in New Providence, especially those who frequent Rubis gas stations, had faced a dramatic price hike. In mid-February, the supplier’s price at the pumps was $5.16 per gallon - below its competitors. By March 2, that price had risen to $5.52.

 While Shell stations did not increase during that time frame, remaining at $5.37, Esso rose by five cents, increasing from $5.19 to $5.24.

 Foreign Affairs Minister Fred Mitchell has predicted a high of $8 per gallon of gas this spring.