By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

The Prime Minister last night said the Government has agreed to grant petroleum retailers their long sought-after margin increases they say are essential to the survival of their companies.

Philip Davis KC, speaking on the first episode of the Rundown on ZNS last night, said his administration will give dealers a 25 cent increase in their gasoline margins and 15 cents per gallon of diesel. This will take the margins to 79 cents per gallon of gasoline, as opposed to the current 54 cents, and 49 cents for diesel, representing 46.2 percent and 44 percent rises respectively.

“I’m happy to say that we have resolved those issues and it’s been a long haul,” said Mr Davis. “Part of the issue is, yes, my concern was what impact it’s going to have on the Bahamian people and we have satisfied ourselves now that there could be movement, and today, we settled the issues that they had with them.”

Mr Davis explained the increase will not be “major” for consumers as gas prices have declined over the past year and are expected to fall for the remainder of 2024.

“The resolve is that there will be an increase in their margin, both for gasoline and diesel, added to their margin and it would not have, as I said, the deleterious effect on the Bahamian public, as it would have done if we had done it much earlier,” he explained.

“It’s like 25 cents on gasoline and 15 cents on diesel. It is manageable when we look at, first of all, how gas prices have declined over the last year and continue to decline, and expect that gas prices will continue to decline through to at least December of this year.”

Mr Davis said although he was “sympathetic” to the plight of gas retailers and offered some relief 18 months ago, he did not want the margin increase to raise overall fuel prices and negatively impact the public. “This has been ongoing and the retailers are well aware of the challenges that we’re having and that they were having,” said Mr Davis

“I was sympathetic to them. About a year and a half ago we did make an initiative to assist them, which we did, but... we promised to get back to them on this matter, and we finally got a resolve and the time is now right for us to do what we’re doing, because they will not have the kind of negative impact on the Bahamian people that it would have had if we done it sooner.”

Gas retailers have not received a margin increase since the then-Ingraham administration granted one 13 years ago in 2011.

Unlike virtually all other industries, which are able to increase prices to cover rising operating expenses, the Bahamian petroleum industry operates on price-controlled fixed margins that require government approval before they can be changed.

Dealers say that, especially following the post-COVID cost of living crisis, ever-rising expenses have effectively wiped out the 54 cent and 34-cent margins per gallon of gasoline and diesel sold, driving them into losses and placing some in a position where they are threatening to close their operations.

The Government, though, had been reluctant to raise the margins for fear it will increase fuel bills for motorists.