The government has rejected an immediate increase in the profit margins paid to gas station dealers, saying it cannot absorb millions of dollars in fuel-related costs while also requiring consumers to finance higher returns for retailers.
Prime Minister Gaston Browne said the dealers did not specify the precise increase they wanted during recent discussions with the government. He estimated, however, that they could be seeking an additional 50 cents or more on each gallon of fuel sold.
“We said no,” Browne declared during the Browne and Browne Show on Saturday.
The decision followed a meeting between the prime minister and members of the Gas Station Dealers Association after several service stations closed temporarily as part of an effort to press the government for improved margins.
Browne said he learned shortly before 10 p.m. that dealers planned to close their stations the following morning. He contacted several operators and insisted that the stations reopen before he would agree to meet with the association.
The prime minister said the stations reopened and the subsequent meeting was respectful and productive, although the two sides did not agree on several issues.
Browne acknowledged that the dealers’ request was not unreasonable and said they had been seeking an increase for approximately a decade.
The operators reportedly raised concerns about higher operating expenses, including the increased minimum wage and credit card processing fees of between 3% and 3.5%.
Browne accepted that the minimum wage increase had affected their earnings. He also appealed to commercial banks, particularly ACB Caribbean and the Eastern Caribbean Amalgamated Bank, to reduce the processing fees imposed on gas station operators.
However, the prime minister said the timing was inappropriate because the government had already eliminated the 15% fuel consumption tax, sacrificing an estimated EC$4 million in monthly revenue.
He said the government had also paid as much as EC$15 million to the West Indies Oil Company to prevent consumers from paying the full cost of gasoline and diesel.
“It has to be a joint burden,” Browne said, arguing that the government could not continue surrendering tax revenue and paying subsidies while also passing an increase in dealers’ margins on to motorists.
The prime minister also stressed that the recent EC$2-per-gallon increase in gasoline and diesel prices did not generate additional profit for the government.
He said the adjustment was intended to cover higher international fuel costs and prevent the government’s subsidy obligations from increasing further.
Browne maintained that the administration remained sympathetic to the financial pressures facing service station operators but indicated that consumers and the government could not be expected to carry the entire cost.
This article was originally published by Antigua News Room. Read the original article here: Government Rejects Immediate Increase in Gas Station Dealers’ Margins.