'Unfair' decision on fuel margin increase

Weeks after a margin increase came into effect for petroleum retailers, FOCOL chairman Sir Franklyn Wilson said yesterday the decision was “unfair” to wholesalers, who have not had any adjustment to their margins for years.

“It’s not fair to be completely honest, but the wholesalers have to accept that the retailers are making the noise and the politicians are listening to them,” Sir Franklin told reporters outside Invest Fest Bahamas in Baha Mar.

“That is the reality. It’s not fair.”

In September, the government announced that retailers will receive a 25 cent increase on their gas margin and 15 cent on their diesel margin.

The increases came after years of unrest among retailers, who lamented the impact of low margins on their profitability.

The Davis administration has long been adamant that there would be no increase in margins, citing the impact of raising prices at the pump when Bahamians were already deeply concerned about the high cost of living .

However, petroleum traders noted that government fees and taxes made up a significant portion of fuel prices for consumers.

With recent fuel prices, the combination of duty and VAT was significantly more than the 88 cent markup that retailers and wholesalers split before the recent increase. Wholesalers get 35 cents per gallon of fuel.

The recent margin increases for retailers were the first since 2011, when they received a 10 cents per gallon increase in gasoline and a 15 cents per gallon increase in diesel fuel.

Sir Franklin said yesterday that wholesalers have not seen an increase for more than 20 years.

“On diesel, I think the last time wholesalers saw their margins increase was in 2002,” he said.

“That can’t be fair.”

When asked if wholesalers are hurting because of unchanged margins, Wilson said, “All I’m saying to you is, just look at that and ask yourself, ‘Is that fair?'”