Delta Petroleum Gas Pumps at Osborne's Service Station.

Montserrat Fuel Retailers Decline to Purchase More Gas, Waiting for Government to Increase Margin

Montserrat was brought to a standstill Thursday as motorists stayed close to home or resorted to carpooling to conserve gas as news spread that both local fuel retailers had run out of fuel.

Currently, the retailers are awaiting a decision from the government on their request for an increase in the profit margin to enable them to continue operating. Both retailers are said to be in significant debt and their future is in peril unless something changes quickly.

On Thursday morning, Premier and Minister of Finance Joseph Farrell took to the airwaves to express his shock that both A&F Gas Station in Sweeneys and Osborne Service Centre in St. Peters had decided to stop dispensing gas to motorists.

According to sources close to the issue, the retailers received fuel last Friday and declined to reorder once fuel ran out on Wednesday. 

An excerpt from the letter sent by the retailers to the Government said “This will undoubtedly be the last time we will be coming to the negotiation table to discuss the inadequate support and resources provided to us, as the retailers. In order to be sustainable in the long term, we require the following:

  1. A margin percentage of 10% of the price per gallon (this equates to an $0.86 increase to the current margin)
  2. Margin to be a percentage, not fixed dollar-cent figure, in order to protect against fuel market price changes.

“We understand the GoM’s primary focus of price sensitivity to the end customer, however, at this juncture, both requirements are for the sustainability and survival of the fuel retailers, which inevitably, is in the best interest of all parties involved. If we cannot reach an agreement on this by Friday 29 September 2023, both fuel retailers will unfortunately be forced to cease retailing fuel, indefinitely.”

The premier said that the retailers had made a written request to the Government of Montserrat for an increase in the margin, to which on September 27 they asked for patience as they awaited details from Delta Petroleum to make their decision. He added that Delta Petroleum had also made a similar request for an increase in their margin. At present, Delta receives $1.75 per gallon and retailers get $1.00 per gallon.

“Government is sympathetic to both Delta and retailers but is also conscious that any increase in the margins would result in an increase for the consumer,” Premier Taylor read. He continued to say that taking a decision without the critical information from Delta. “It would be an understatement to say the least, but government is taken back by the actions taken by the retailers without advance notice. Such actions would impart, disrupt the lives of many Montserratians from going to work transporting school children and persons wishing to undertake personal choice.”

He called for the retailers to reconsider their actions and make petrol available to the travelling public while the government works to address this matter.

Leader of the Opposition Paul Lewis said the MCAP-led government seems to be taking Montserrat from crisis to crisis.

He said it was “essential for government authorities and stakeholders to work together to find a swift and equitable solution to resolve this issue and ensure the availability of fuel for the public. Providing the public with a clear timeline for when fuel will be available at the fuel stations or outlining alternative solutions is crucial for transparency and managing expectations during such shortages. It’s important that the government communicates its plans and actions effectively to keep citizens informed and to address the current challenges,” Lewis said in a recorded statement aired on ZJB Radio.

“The people have long last patience with these situations as a result of poor management after poor management of too many critical issues leaving the people the victims. Mr. Premier this is not the time to ask the people to be patient it is time for an immediate solution this climate created by this latest crisis has further crippled our ailing economy and created further frustration and hardship on the people. Mr. Premier you said you have a government of action. Where is the action? We need action now,” the Opposition Leader.

Both retailers are awaiting a decision by the Cabinet which is meeting today. One retailer is said to be almost $200,000 in debt and unsure whether they will even reopen because of the current cost of operating the station.