By ANNELIE NIXON

Tribune Business Reporter

anixon@tribunemedia.net

THE Government has competition legislation on its “drawing board”, the Prime Minister confirmed yesterday, as he pledged that the Government will “see how” it can mitigate the threat from soaring fuel prices.
Philip Davis KC, speaking prior to today’s VAT elimination on uncooked food items, said he will continue to seek ways to provide financial relief to Bahamians with gas prices on the rise.
“We intervened, if you recall, back in 2022,” he said. “Oil prices were over $100 per barrel. We intervened at that time to help the to ensure that it did not impact the consumer, and that worked well. At this time, we are going to look again to see how we can intervene. But we have to, again, balance that with any loss, how that loss may be make up when we intervene.”
The Government earns both 10 percent VAT, as well as an ad valorem charge of around $1.06 to $1.16, on every gallon of gasoline sold. This means that its fuel-related revenues will increase due to the oil price spike from the Middle East war, and the Opposition has already urged it to cap VAT at the pre-increase levels to reduce the burden on Bahamian motorists and the wider economy.
Dexter Adderley, president and chief executive of FOCOL Holdings, which operates the Shell brand in The Bahamas, yesterday said one of the three oil majors increased its gasoline and diesel prices and the others are expected to follow. The timing depends on when prior inventories are sold out, and when new shipments are purchased and arrive on-island.
Disclosing that there are no signs of any supply shortages impacting The Bahamas in the near-term, Mr Adderley told Tribune Business: “We’re not seeing any supply shortages at the moment. We’re in regular contact with our suppliers, and at the moment our main priority is to maintain an adequate supply.
“But, in the near term, we’re not seeing any shortage. The entire world is monitoring it. The best thing we can do is plan and monitor. We are expecting similar [price] changes locally across the brands.”
Mr Davis, meanwhile, said VAT imposed on unprepared food items is a different form of pressure than that from spiking fuel costs. He said the Government has control over VAT and will do what it can to minimise any negative impacts on Bahamians.
However, he warned that in order for the Government to provide any tax relief, it must first determine how it will replace any revenue loss that results.
“First of all, whenever you talk about tax relief, from a legislative point of view you have to also look at how you replace... that's a loss of income for the country,” the Prime Minister said. “We have to be responsible in how we look at reducing VAT or any tax. What are we going to replace it with?
“And so in this instance, over the last four years, we have worked assiduously to grow the economy, find new means of revenue to be able to make up for any loss from VAT being reduced to what it is today, and we are confident that we have found that source of revenue.
“The revenue stream has shown it, and that's why we're able to reward the Bahamian people with this tax cut today. First, without a doubt their own conduct, their productivity and helping the economy to grow aided us to be able to do what we're doing today, and this is their reward.”
Given that the House of Assembly has been prorogued, Mr Davis said any new legislation such as competition-related laws will not be introduced right now. However, his administration has developed such legislation which will “ensure that we're able to check the points of the value chain that reduce the cost at the end of the day to the retailer”.
“We have on our drawing boards as we speak, introducing what they call competition legislation to ensure that we're able to check the points of the value chain that reduce the cost, at the end of the day, to the retailer, to see whether there are any ways we can break-up what I call any monopoly along that line,” he said. “So competition legislation is on the agenda, and that's what we're looking forward to in the new term.”
Tyrone Butler, the Bahamas Taxi Cab Union (BTCU) president, said he is still awaiting a meeting with the Road Traffic Department’s controller to request a fare adjustment that will offset price hikes on fuel. He added that while the Government provides a rate sheet, as independent business persons they are allowed to “add an additional charge to cover their cost of operating”.
“In the face of these extreme measures, that's affecting everybody,” he said. “Under normal circumstances, the fares that the Government said are merely a guideline, it's meant to be kind of a standard rate that you would apply for the first one or two persons, and then it has some additional charges if you're taking extra persons.
“But let's say the customer shows up, and where they're going is not on the rate sheet... Let's say you catch a taxi from the airport, and you're going to, say South Beach, but South Beach was not on the list of rates that the Government gave, so then the driver has to use his discretion to make up a rate for that area based on the persons that he's taking.
“Let's say now the prices increase. Because taxi drivers are independent business persons, they do have a right to add an additional charge to cover their cost of operating. But it should be within reason.”
Livery drivers, whose fares are not regulated by the Government, are watching gas prices and will adjust accordingly, Taurian Austin, president of the Bahamas Livery Drivers Union (BLDU), said.
“We don't have any immediate plan at this time,” he said. “We will be watching how this price of gas goes up. We don't have a plan to say, but if it continues to rise, we will probably adjust our prices in what we offer our clients. That’s the only thing we can do right now.
“We understand what’s going on globally in the world, and I think every country, especially in the Western Hemisphere, is going to be affected with gas prices. I mean, you talk to Americans and they're talking about how their gas prices have gone up. So, obviously it will affect us as well. And so all we can do is probably adjust our pricing accordingly to reflect the gas prices. But we're not going to do that quite yet. We want to see how long it lasts. We're going to monitor it closely.”
Harrison Moxey, president of the United Public Transportation Company (UPTC), said he is also monitoring gas prices - diesel in particular - as it will impact his members, who are jitney owners and operators, the most.
“So I'm still making some assessments on that,” he said. “So I can't say anything until we get it out and we have a discussion. But it's already in our group discussion. So I’m just looking at it to see what’s the comparison of the impact, or what we anticipate, how long we anticipate that to be, what that’s going to mean for us. So I just have to do an analysis of it properly. But we already had some discussions on it, as to what might be coming or how long it may be....”