Bahamas News
12-24-04, - 12:32 AM
LPG Dealers Warned
By Macushla N. Pinder
The Bahama Journal
http://www.jonesbahamas.com/data/images/news/categories/641_4130.jpg
Unsafe and unlawful circumstances have been created by a propane gas price hike dispute. The few retailers who remain open are filling 100 pound cylinders that are being transported by consumers along Harrold Road
and Gladstone Road. (©Vision Photo/Tim Aylen)
In the latest development of an ongoing dispute over the price of liquid propane gas, Minister of Trade and Industry Leslie Miller yesterday warned LPG retailers that their business licenses would be suspended “indefinitely” if they continue to discriminate in their selling practices.
For more than two weeks now some dealers have been refusing to sell cooking gas to the general public, but are servicing bulk contracts as they continue to press the government to approve a $22 increase for a cylinder of 100-pound cooking gas.
“I gave clear instructions this morning that if by 12:01 Thursday all of the distributors are not selling LPG to the entire population of The Bahamas, their licenses are to be suspended forthwith. And it will be done with no exception,” the Minister said.
“The buck stops right here…They are breaking the law and this is called hoarding. It is unfair. There is no such thing as selective selling in The Bahamas. If you’re open for business, you’re open to the entire public. This is very simple and that’s just the way it is.”
The Minister also said that the government is not prepared to go beyond approving a $15 increase from the present $50 price being paid for each cylinder of LPG.
More than 80 percent of the local LPG dealers have been on strike since week before last, saying that they will keep their businesses shut until their demand is met.
But after considering the retailers’ proposal for an increase, Minister Miller said Cabinet has agreed to a new price scheduling for both LPG wholesalers and retailers.
LPG suppliers like Shell and Caribbean Gas reportedly sell a 100-pound cylinder of gas to retailers for $38.
According to Minister Miller, the retailers in turn are permitted a maximum markup of $12, thus a retail selling price of $50.
However, Cabinet this week agreed to allow suppliers to enjoy a $7 markup, increasing their price from $38 to $45 for a 100-pound tank.
“This means that retailers can actually now appreciate an increase of $20 – they are now buying at $45 from the importers and selling at $65,” the Minister explained. “…This is more than 90 percent of what they asked for.”
But spokesman for the Propane Gas Retailers Association, Peter Adderley, yesterday said the Minister Miller’s calculation differs from that presented to both the Minister’s office and the Association by a highly reputable Bahamian accountant.
Mr. Adderley was quick to point out that the Association generally feels that Minister Miller’s “tone or language” does not represent the entire Cabinet, despite the decision being that of the entire body.
He added that retailers are “very disappointed” with the decision.
“It is unfortunate that the government now agrees to give a $15 increase which was proposed by the Association 18 months ago,” he said.
“It is also unfortunate that there is no clear understanding of the facts, which would show that since the 18-month window, our operational costs and all other relative expenses have increased. This is the lone industry in The Bahamas that has not been permitted an increase for eight years.”
The retailers continue to insist that selling LPG for $65 per 100-pound cylinder would not be enough for them to make profits.
Minister Miller said his office never received any notice from the retailers formally rejecting the Ministry’s offer.
“To this day, this Ministry has never received any written proposal from the (Propane Gas) Retailers Association indicating that they did not accept the $15 that we proposed,” he explained. “They never came back to us. When we heard from the retailers it was by way of the press. They never had the decency to write this Ministry a letter saying that we cannot accept the proposal as outlined by the government.”
Minister Miller added that the government is however committed to revisiting the present price structure scheme in January 2005, at which time a proper mechanism would be worked out.
“We will be initiating a sliding scale apparatus almost similar to what has been adopted by the petroleum dealers, who receive a certain percentage markup on each invoice,” he said.
Meantime, the members of the Propane Gas Retailers Association were expected to meet to discuss the issue further.
By Macushla N. Pinder
The Bahama Journal
http://www.jonesbahamas.com/data/images/news/categories/641_4130.jpg
Unsafe and unlawful circumstances have been created by a propane gas price hike dispute. The few retailers who remain open are filling 100 pound cylinders that are being transported by consumers along Harrold Road
and Gladstone Road. (©Vision Photo/Tim Aylen)
In the latest development of an ongoing dispute over the price of liquid propane gas, Minister of Trade and Industry Leslie Miller yesterday warned LPG retailers that their business licenses would be suspended “indefinitely” if they continue to discriminate in their selling practices.
For more than two weeks now some dealers have been refusing to sell cooking gas to the general public, but are servicing bulk contracts as they continue to press the government to approve a $22 increase for a cylinder of 100-pound cooking gas.
“I gave clear instructions this morning that if by 12:01 Thursday all of the distributors are not selling LPG to the entire population of The Bahamas, their licenses are to be suspended forthwith. And it will be done with no exception,” the Minister said.
“The buck stops right here…They are breaking the law and this is called hoarding. It is unfair. There is no such thing as selective selling in The Bahamas. If you’re open for business, you’re open to the entire public. This is very simple and that’s just the way it is.”
The Minister also said that the government is not prepared to go beyond approving a $15 increase from the present $50 price being paid for each cylinder of LPG.
More than 80 percent of the local LPG dealers have been on strike since week before last, saying that they will keep their businesses shut until their demand is met.
But after considering the retailers’ proposal for an increase, Minister Miller said Cabinet has agreed to a new price scheduling for both LPG wholesalers and retailers.
LPG suppliers like Shell and Caribbean Gas reportedly sell a 100-pound cylinder of gas to retailers for $38.
According to Minister Miller, the retailers in turn are permitted a maximum markup of $12, thus a retail selling price of $50.
However, Cabinet this week agreed to allow suppliers to enjoy a $7 markup, increasing their price from $38 to $45 for a 100-pound tank.
“This means that retailers can actually now appreciate an increase of $20 – they are now buying at $45 from the importers and selling at $65,” the Minister explained. “…This is more than 90 percent of what they asked for.”
But spokesman for the Propane Gas Retailers Association, Peter Adderley, yesterday said the Minister Miller’s calculation differs from that presented to both the Minister’s office and the Association by a highly reputable Bahamian accountant.
Mr. Adderley was quick to point out that the Association generally feels that Minister Miller’s “tone or language” does not represent the entire Cabinet, despite the decision being that of the entire body.
He added that retailers are “very disappointed” with the decision.
“It is unfortunate that the government now agrees to give a $15 increase which was proposed by the Association 18 months ago,” he said.
“It is also unfortunate that there is no clear understanding of the facts, which would show that since the 18-month window, our operational costs and all other relative expenses have increased. This is the lone industry in The Bahamas that has not been permitted an increase for eight years.”
The retailers continue to insist that selling LPG for $65 per 100-pound cylinder would not be enough for them to make profits.
Minister Miller said his office never received any notice from the retailers formally rejecting the Ministry’s offer.
“To this day, this Ministry has never received any written proposal from the (Propane Gas) Retailers Association indicating that they did not accept the $15 that we proposed,” he explained. “They never came back to us. When we heard from the retailers it was by way of the press. They never had the decency to write this Ministry a letter saying that we cannot accept the proposal as outlined by the government.”
Minister Miller added that the government is however committed to revisiting the present price structure scheme in January 2005, at which time a proper mechanism would be worked out.
“We will be initiating a sliding scale apparatus almost similar to what has been adopted by the petroleum dealers, who receive a certain percentage markup on each invoice,” he said.
Meantime, the members of the Propane Gas Retailers Association were expected to meet to discuss the issue further.