By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian businessman yesterday branded the jump in local fuel prices “terrible news” but asserted that this could be counter-balanced by the country’s economic fundamentals that “always work in our favour” during times of crisis.
Sir Franklyn Wilson, the Arawak Homes and Sunshine Holdings chairman, told Tribune Business that The Bahamas’ proximity to the US and the market that generates 90 percent of its tourists may again come to its rescue and help to offset the economic fall-out from the Middle East conflict that is now being felt through soaring fuel and energy costs.
The country’s location, he added, being so close to its top visitor market may counter the impact of increased air fare and travel costs in comparison to more far-flung destinations, as well as fit the bill on security concerns as it is a considerable distance from the war zone. The Bahamas may also benefit from the fact that travellers, especially during times of economic and other stresses, like to remain close to home.
Acknowledging that it is impossible to predict how long the Middle East conflict will last, and how widespread it could become, Sir Franklyn told this newspaper: “The bad news is, of course, in the short run this [skyrocketing gas prices] is terrible news. The fact of the matter is that fuel prices have gone up significantly, and what the hell can the Government do about it?”
The chairman of BISX-listed FOCOL Holdings, which operates the Shell brand in The Bahamas, said Bahamas Power & Light’s (BPL) decision to hedge, or lock-in the price, of two million barrels of oil at an all-in cost of $70 per barrel “may work at this point in time” to prevent electricity costs rising in the short-term.
However, with multiple countries such as the UK voicing concern over potential crude oil, fuel and natural gas shortages due to the Iran conflict blocking the Strait of Hormuz, through which 20 percent of the world’s energy and fuel supply most flow, Sir Franklyn warned Bahamians against automatically assuming this nation will escape such challenges.
“These are such unusual times that public policymakers should not go on the assumption, and the Bahamian people should not go on the assumption.. they should not assume fuel is available just on the basis of being able to buy the resource and pay for it,” he argued. “Do not assume that. These times are unprecedented. I don’t wish to be alarmist, but by any key measurable these are unprecedented times and no one resident in The Commonwealth of The Bahamas knows really what the outcome is of that.”
Sir Franklyn, though, voiced optimism that what he described as The Bahamas’ long-standing economic “fundamentals” will again help to protect this nation and mitigate some of the Middle East fall-out. “These types of realities remind us of the fundamentals that make The Bahamas special,” he told Tribune Business.
“Now, what are those fundamentals? Those fundamentals are our proximity to the US. It may have the effect on people, who are deciding they need to be a bit more frugal, that translates into going to The Bahamas than going further afield. Events like this drive home the point that the fundamentals of the country always have a way where we can say, Thank God.
“These are times when the fundamentals of the country come into play, and one fundamental is the proximity, the location where we are. For example, who could have predicted that today we would have as many visitors coming to The Bahamas from Canada? These are the type of things that, when things like this happen, the fundamentals kick in and we say: ‘Thank God’. The fundamentals of The Bahamas are such that there is always something that works in our favour,” Sir Franklyn added.
“Who wants to go on a Mediterranean cruise now? Why do that? Why not a Caribbean cruise that typically has itineraries that feature The Bahamas? The location is one such fundamental that God has organised for us. There is often a angle that gives some benefit or some opportunity to The Bahamas. Economists love to talk about fundamentals and, a lot of times when we say that, Bahamians don’t necessarily list location as one, but events such as this suggest we should consider it as such.”
Meanwhile Dionisio D’Aguilar, Superwash’s president, told Tribune Business that the increase in oil-related costs is set to impact 30 percent of his cost base but reiterated that - for the moment - he plans to hold customer prices at their current levels and monitor the Middle East conflict and it’s ongoing economic impact.
“Superwash is a large consumer of energy. We consume quite a lot of electricity and we consume a vast amount of propane,” he said. “Obviously those prices are being impacted quite significantly because, obviously, there’s a fuel component to every gallon of propane and every kilowatt hour of electricity we consume. There are fuel components embedded in the price.
“Around 30 percent of our cost base is the cost of energy. Given the 30-40 percent increase in the cost of energy I expect that to filter through to the cost of a kilowatt hour and a gallon of propane. Given that energy is such a large component of the cost base, that will force me to either increase prices or reduce profits. There’s very little mitigation that The Bahamas will be able to do in terms of this fuel cost rise.”
Mr D’Aguilar, though. said he is holding off on any consumer price hikes for the moment in the hope that predictions by Donald Trump, the US president, of a swift end to the war within the next two to three weeks come true. “I’m not going to move. I’m going to see what happens in the Middle East. If you listen to the pundits, it’s highly unlikely that prices will come down to where they were even when hostilities subside in the Middle East,” he added.
“The Government has seen fit enough to engage in fuel hedging [at BPL] following the previous administration. I’m waiting to see how they are going to mitigate electricity costs. Obviously the price of propane, I can’t do anything about that. I’m subject to market forces. I’ll wait and see where it settles. By and large, Superwash doesn’t change prices during the course of a year.
“We set our prices at the beginning of the year and hold them for the entire year. If there’s a shock to the system we’ll re-evaluate that strategy but, generally, Superwash sets its prices on January 1 and keeps to the plan through the end of the year.”
Mr D’Aguilar also teased the Davis administration over BPL’s December 2025 move to hedge two million barrels of oil at a locked-in price of $70 per barrel, arguing that they “finally saw the light after trying to bamboozle the Bahamian people into think the fuel hedge had failed” under its Minnis predecessor.