By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net

The Bahamas Petroleum Retailers Association’s (BPRA) vice-president yesterday said he is “very concerned” a global recession caused by Donald Trump’s tariff policies could eliminate the sector’s recent gains.

Vasco Bastian told Tribune Business that petroleum retailers are just starting to see “positive results” from the margin increase granted by the Davis administration last year. He voiced fears that any economic downturn may drive up oil prices and erode industry profit margins again.

And, with the Bahamian economy having rebounded over the past two years following the COVID-19 pandemic, Mr Bastian said it is “very scary” for business owners to fear it could return to levels last seen during the 200-2009 financial crisis.

“We’re just seeing a slight adjustment in growth over the last 24 months, and so the thought of going back to the 2008-2009 recession is scary. Very scary. I don’t want to think about it,” she said. “I’m very concerned as someone who is a retailer and has been in this industry for over two decades. I really hope that doesn’t happen again.”

Mr Bastian said gas retailers, who last year received their first margin increase since 2011, have been seeing “positive results” lately and there are concerns a global recession would drive up the cost of crude oil and erode their profit margins.

“We are starting to see positive results within our industry in the last six months. Things have been better for us than they’ve been in two or three years. The thought of that profit being eroded due to the higher cost of crude oil, and having higher prices of gas and diesel at the pump, is scary,” said Mr Bastian.

“We need to continue on the trajectory we are on. We just got that margin increase in October so we’re just six months into it, and to think that we could go back to where we were three or four years ago is very worrying for retailers. I hope that it doesn’t happen, but at the end of the day we’re just going to have to brace ourselves and make the adjustments where we will need to as the global industry sets the trend.”

Mr Bastian added that when the price of oil increases globally the effect is “immediate” in The Bahamas, impacting the production of goods and services worldwide as fuel is a vital input.

“There are so many by-products of crude oil, and crude oil prices have a big impact on the global market. On a national level here in The Bahamas the effect is immediate. Once the price of crude oil goes up, when we get that next shipment, it reflects in the cost of diesel and gas. It’s nothing that we can prolong,” said Mr Bastian.

“We need fuel to run our businesses, drive our cars. Equipment and factories need gas and diesel, and all the other by-products of crude oil. So many businesses nationally and globally depend on stable crude oil prices. It’s one of those commodities you can’t operate without.”

Mr Bastian said the only thing gas retailers can do to curb rising costs is increase the price of goods sold in their stores to align with market prices. He explained that since the 50 percent VAT rate slash on groceries came into effect last week, consumers have been purchasing more items in gas station convenience stores.

“We just recently executed the VAT adjustment on certain items to 5 percent that the Government initiated, so that’s some savings for consumers. We’ve really started to see a positive return. Even though it’s only been a week, we see customers come in the store, and they’re buying more items. They’re paying less for it because the VAT has been reduced,” said Mr Bastian

“The only thing we can do in this industry is to adjust our prices to our consumers. For the gas it’s a fixed margin, so that determines price. We can adjust our prices in store slightly so this crisis won’t be so significant, but there’s only so much we can do. We still have to keep stock, pay staff, pay electricity.. It is what it is and we will do what we have to.”