With the increase in gasoline and diesel prices and an increase in wholesale margins, gas station owners say they will have to wait to see if they will benefit from an increase in retail margins as this was not made clear by Finance Minister Colm Imbert in yesterday’s 2017-2018 Budget.
In his presentation, Imbert announced an increase in super gasoline from $3.58 a litre to $3.97 and diesel from $2.30 a litre to $3.41. He said an increase in these existing margins is expected to improve cash flow and profitability to those within the liquid petroleum fuel industry, promote competition among service stations and create enhanced and sustainable jobs.
Imbert said within the existing price structure, wholesale margins for premium, super and regular gasoline were set at 14.5 cents and since 2009 had remained constant at 9.5 cents for diesel and kerosene.
Contacted yesterday, Petroleum Dealers Association president Robin Naraynsingh said Imbert specified an increase for the wholesalers, who include National Petroleum (NP) and Unipet, by five cents. However, he said the increase in price will mean an increase in operation costs for dealers.
“We have to get more money to put out to buy gas. It will be more expensive for us to operate,” Naraynsingh said.
He also questioned what Imbert meant when he spoke of the dynamics between the private and state sectors, describing it as “confusing.”
“NP represents the state sector, so I don’t know if he intends to sell gas stations to dealers so they can have a more private sector interaction with the state sector,” he said.
“Gas station owners use private sector money to increase the cash flow for the state sector, because all dealers spend their private money to buy gas to sell gas so that they can engender a margin to fuel the industry itself. The Minister did not make clear pronouncements, we will have to wait on the order from the ministry.”
Gas station owner Reval Chattergoon explained that dealers get an increase in terms of cents on a litre and will have to wait until later today to see what their respective retail margin increase will be.
“We make cents on a litre and not on the dollar. We will have to wait until our first bill or when we call the wholesaler…while super went up roughly by 30 cents, wholesale margins get five cents…we may not get 25 cents on that litre, we may get five or six cents on that litre,” Chattergoon said.
“We are hoping to get a significant increase because we have been suffering for years.”