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MONDAY, APRIL 17, 2023
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loans ‘too high’ ‘Someone did some thinking’: Bad - yet at 14-year low Petroleum competition push By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net PETROLEUM retailers and wholesalers are studying “significant new ideas” proposed by the Government to foster greater competition - “but not at the expense of consumers” - in a bid to resolve the industry’s structural woes. Sir Franklyn Wilson, chairman of BISX-listed FOCOL Holdings, which operates the Shell brand, told Tribune Business that “someone did some thinking” after the Davis administration unveiled its proposal to both the oil majors and gas station operators during a Friday morning meeting. With all parties due to give their responses by this Wednesday, he described the contents as “a new day” for the Bahamian petroleum industry’s business model amid the near-constant calls from retailers for an increase in long-standing fixed margins so that they can return to profitability and absorb a multitude of ever-increasing costs.
• Gov’t proposal to break margin deadlock • But solution ‘not at expense of consumer’ • Sir Franklyn: ‘I saw no one throw stones’
SIR FRANKLYN WILSON
SIMON WILSON
Sir Franklyn, revealing that the Government’s proposal seeks to increase competition at all levels of the Bahamian petroleum industry - between retailers as well as wholesalers - even indicated it may involve moving away from the fixed margins on every gallon of gas and diesel sold, which station operators have long argued is the root cause of their plight. However, Simon Wilson, the Ministry of Finance’s financial secretary, told Tribune Business yesterday that the proposal does not call for the elimination of the industry’s price-controlled fixed margins as the Government seeks to balance the interests of wholesalers, retailers and Bahamian consumers. Describing the situation as “very delicate”, he acknowledged that some gas station operators as well as the entire industry’s business model are “under a lot of pressure” and described the proposal unveiled on Friday as “a first step”. If agreement and buy-in is obtained from both wholesalers and retailers, Mr Wilson
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City’s ‘turned the tide’ without Central Bank By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE DOWNTOWN Nassau Partnership’s (DNP) co-chair says the city has “turned the tide” on its revival despite the Central Bank’s decision to terminate development of its new headquarters at Royal Victoria Gardens. Charles Klonaris told Tribune Business that while the multi-million dollar project would have provided a confidence boost for downtown Nassau’s prospects, and enhanced the area’s overall appearance, there was sufficient “momentum” behind Bay Street and the city to prevent any
“disruption” to their continued progress. With the Nassau Cruise Port’s $322.5m overhaul already attracting a record 28,000-plus passengers in a single day, he added that this presents “for the first time in a very long time” significant economic opportunity for Bay Street merchants, restaurants, tour and excursion operators, straw vendors, taxi drivers and all other sectors reliant on the cruise industry. And, while acknowledging that downtown Nassau had generally been locked in a 20-year “downward spiral” prior to COVID-19, Mr Klonaris told this newspaper that fresh investment
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GB water rise conflict ‘most fantastic thing’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A GRAND Bahama resort operator yesterday said its owners will have to “pay more for the privilege of running a hotel” on the island if proposed water rate increases are ultimately approved. Magnus Alnebeck, the Pelican Bay Resort’s general manager, told Tribune Business it is “the most fantastic thing” that the island’s water “monopoly” is owned by the same people responsible for regulating it and approving the proposed rate increases.
Pointing out that approval of Grand Bahama Utility Company’s proposal will merely increase his resort’s losses, he added that he opposes the rate increase while “absolutely” agreeing that the Utilities Regulation and Competition Authority (URCA) should take over regulation of all utilities within the Port area. The Grand Bahama Port Authority (GBPA), which is responsible for regulating GB Utility and approving a rate increase proposal that could take effect as early as May 1, has already pledged
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The Central Bank’s governor says loan delinquencies are still “too elevated” compared to global standards even though - at 7 percent of total outstanding credit - they have fallen below pre-COVID levels and are at their lowest in 14 years. John Rolle, in written replies to Tribune Business questions, said slow economic growth and relatively high non-performing loan rates have deterred Bahamian commercial banks and other formal lenders from extending credit to businesses and home buyers during the past decade in a trend that pre-dated the pandemic. While total loan delinquencies, representing credit 90 days or more past due, stood just below $400m at $397m at endFebruary 2023, he added that it was economic growth that drives commercial bank lending rather than the other way around. “In the domestic sector, the Central Bank is concentrated on making the
JOHN ROLLE environment more favourable to private sector lending as the basis for more positive medium-term outcomes,” Mr Rolle told this newspaper. “Growth prospects in the domestic banking sector are tied to the overall performance of the economy, more so than the economy being driven along by bank lending. “This is because lending is more sustainable in the Bahamian domestic setting when the economy has the corresponding foreign exchange inflows to absorb the spending on imports that credit stimulates. Hence, slow economic growth on average over the last decade, coupled
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