Motorists now have a small window daily to refill their vehicles, after the local fuel retailers announced new opening hours.
Both A&F Gas Station and Osborne Service Centre (OSC) were open for only four hours on Monday and will continue to do so while they are in negotiations with the Government of Montserrat and Delta Petroleum for new fuel margins.
The stations took the decision not to purchase more fuel from Delta Petroleum (DP), the local wholesaler, to bring the government to the negotiation table. This left residents without the ability to purchase gasoline for their vehicles from Wednesday afternoon to about noon on Saturday.
Owner of OSC, John Osborne said Monday morning on ZJB Radio Montserrat that the issue goes back eight years. However, in 2022, both stations stepped up their efforts to get the government to reconsider the current disbursement of the revenue from the sale of fuel as their businesses were in jeopardy.
Osborne said he has been writing to the Financial Secretary monthly in the hopes of getting a decision on the matter. They received a response in June of 2023. In July, the retailers wrote to the government asking for their decision, indicating no response would mean their last resort would be to act at the end of September.
“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,” the letter said. “In order to be sustainable in the long term, we require the following:
- A margin percentage of 10% of the price per gallon (this equates to an $0.86 increase to the current margin)
- 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.”
Osborne said in the one-hour radio interview that the stations have been running at a loss annually and he has been unable to earn a salary for operating the station. He said the government further eroded the financial situation of both retailers when in 2022 they began to purchase fuel in bulk from DP for most of the ministry vehicles. The businessman said this amounted to a 40% loss in revenue for the retailers. Added to this, local sand miners were also given the opportunity to purchase fuel wholesale at a rate much lower than the retailers pay DP.
The gas station owner said both he and Ashley Lindsey of A&F had calculated that September 2023 was when they would reach their debt ceiling.
When asked by Basil Chambers to confirm the revenue split for the various parties, Osborne explained that while on the books the stations are to receive $1.00 per gallon, after paying DP 12 cents per gallon in charges, their take-home is 88 cents per gallon. DP also wants an increase on the $1.75 per gallon margin. The government receives 10% per gallon and currently, which Osborne estimated was about $4.56 per gallon for premium gas and $4.40 per gallon for regular.
Premier and Minister of Finance Joseph Farrell explained Saturday that Delta contracts the retailers to sell fuel. Government does set margins to control the price to protect the consumer. He said the entire population is being held at ransom. An offer has been made to the retailers which they are waiting for them to agree on. There are other underlying issues between Delta and the stations, Premier Farrell added.
The premier implored retailers to open their stations on Saturday morning to help ease the situation for the public. The stations were opened after noon on Saturday, and this resulted in long lines as motorists waited for a chance to fill up.
Until further notice the stations will operate four hours daily. OSC in St. Peters from 10AM to 2PM and A&F in St. Johns from 4PM to 8PM. This was to reduce their overheads such as electricity and staffing.
Osborne was hopeful that a new agreement would be finalised which would help both stations to remain open and begin to reduce the heavy debt load they are both carrying.
Monday October 9, 2023 “Basil Speaks with Petrol Retailer John Osborne”
