Trade and Industry Minister Leslie Miller revealed on Tuesday that the price of gasoline in New Providence could continue to soar as high as $4.50 per gallon in two weeks, leaving concerned residents to question if this expected increase will soon take place in Grand Bahama.
Gasoline prices escalated to as much as $4.06 at some pumps in Grand Bahama last week, while at others, the cost fluctuated between $3.98 and $3.75. The gigantic hike in prices at the pump is forcing motorists to think more economically and conservatively in the use of their vehicles.
Minister Miller said the increase could come any time after Sept. 15, when the next major fuel shipment from Venezuela arrives in the country.
He explained that oil companies often order fuel from Venezuela through the U.S., instead of directly from Venezuela, if they believe that they can make a greater profit through the U.S.
When U.S. prices increase, as a result of OPEC (Organisation of Petroleum Exporting Countries) increases or natural disasters, that price would be reflected in its oil exports.
“You will see an increase, what I term to be a fictitious one, but you will see one. In other words, one that would be related to U.S. prices and not related to prices coming out of Venezuela,” Minister Miller said.
U.S. crude oil prices increased as a result of Hurricane Katrina, which passed over the Gulf of Mexico and caused severe damage and closure of oil refineries in the Gulf States of Louisiana, Mississippi and Alabama after it came inland on Monday.
Several calls made to FOCOL’s (Freeport Oil Co. Ltd.) Managing Director and General Manager Anthony Robinson yesterday to inquire if that oil company had been affected by the rise in gas prices as a result of the devastation caused by the killer hurricane went unanswered.
In an interview with the Freeport News yesterday, however, Boulevard Services Ltd. owner Ambrose Gouthro said the present situation is not all about whether there will be a shortage of fuel or oil, but is a significant matter of production shortage. He said if it turns out that there is a serious production shortage of oil or fuel, then it could affect The Bahamas, thus Grand Bahama.
“Only FOCOL will be able to tell us what their existing supply is and give some indication of when the next increase will be,” Mr. Gouthro said. “However, it appears in the short-term that gas prices will continue to go up. It is a good and bad situation, the fact that Government controls the price of fuel. We as dealers, despite the fact that our costs continue to rise, can’t pass that rising cost to the consumer as our margins are set and it is not a percentage of the cost; it is a fixed number like so many cents per gallon.”
Mr. Gouthro noted that if there is an increase the next time fuel comes in, there is no doubt that the price of super unleaded would be over the $4 mark. However, he was not sure if that would happen to the regular fuel, which he says most people purchase.
“The economic impact on Bahamians in Grand Bahama is going to be a significant one when you think about taxi drivers, bus drivers and contractors,” he said. “It is going to drive the cost of everything else up like houses, buildings, food, you name it. There is no doubt that if prices of gasoline continue to rise, it is going to affect the conduct of business in the country and the test will be how well we handle it.”
On June 29, The Bahamas and 12 other Caribbean countries signed an energy pact with Venezuela, known as PetroCaribe, to secure fuel at a discounted rate. However, The Bahamas cannot benefit from the initiative until it establishes a national energy corporation, which would regulate the cost of the fuel.
The Trade and Industry Minister said he was hoping to establish the corporation before the end of September.
By LISA S. KING, Freeport News Reporter
