By PAVEL BAILEY

THE president and CEO of FOCOL Holdings Ltd said that local gas distributors have little say over fuel prices due to global supply issues, after Bahamian prices jumped past $6 a gallon.

Dexter Adderley acknowledged the sharp rise in gas prices during an interview on the sidelines of an event at Sunshine Holdings yesterday and reiterated comments made by other fuel industry executives in recent weeks.

He spoke after fuel prices crossed the $6 threshold at two major providers over the weekend, with Rubis at $6.33 and Esso at $6.16. FOCOL is the sole licensed Shell distributor in the country. Shell’s fuel is currently at $5.50 a gallon.

Mr Adderley acknowledged that the ongoing conflict in Ukraine contributed to the hike in gas prices, as well as some countries’ ban on Russian oil, resulting in a shortage. Russia is the world’s third largest oil producer. He said that as The Bahamas relies entirely on imported oil to meet its needs, its gas wholesalers have little say over prices, as they operate on a fixed cost.

“As we know the war between Russia and Ukraine certainly has impacted global oil prices and The Bahamas being a total importer of petroleum products that would translate directly into an increased cost of product,” Mr Adderley said.

“Our local industry is price controlled and so basically the wholesalers and the retailers, they pass on a fixed cost on a per gallon basis to the end consumer. So, we have very little control on the ultimate pump prices.”

Shell’s prices are lower than its competitors. Asked about this, Mr Adderley said this was a result of Shell’s fuel reserves at the time of the latest oil cargo. He, however, stated that gas prices are likely to trend upwards across the board in the coming weeks.

“In a regulated market you basically sell at your cost plus the regulated market and so it all depends on how much fuel you have in your tank at the time when you purchase your new cargo. And so, generally if prices are trending up all the oil companies will trend up in some time frame, so it may happen within a week, two weeks it all depends on your inventory at the time of product received.”

When asked by a reporter why gas wholesalers don’t stock up on supplies to offset global price rises, the FOCOL CEO said doing so is “risky business”.

“Stocking up on supplies, that’s risky business because no one knows, we do not know where the prices are going. Tomorrow prices can collapse for one reason or the other. Then we will have the opposite problem, we would have stocked up on high-cost products that the consumers are saying on the international markets prices have collapsed, why is our prices so high? And so essentially we take what the market gives, we try not to predict the market because that’s risky business,” he said.

While Mr Adderley could not predict if oil prices will continue to rise as the conflict in Ukraine continues, he said that he hopes that global suppliers can stabilise the supply of oil so gas prices can go back to normal.

“We hope and pray that the rest of the suppliers around the world can adjust and stabilise the supply of oil products globally and hopefully that will translate into some stabilisation. However, we do not know where that’s going to happen, when that’s going to happen but ultimately that’s the way it works. So, we hope and pray that things settle down and that prices resume to a level that consumers are comfortable with,” he said.