$10 price hike doesn’t break butane strike
And while national attention this week has been focussed on the search and rescue efforts at sea, tonight the Government of Belize is looking for another kind of relief following a blow out in the butane industry. According to the importers, because Belmopan has not been incorporating rising acquisition costs into the pricing mechanism, they’ve been force shut up shop. To appease the businessmen, this afternoon the Government announced a ten dollar increase in the control price of butane. But as News Five’s Janelle Chanona reports, the offer is still nine dollars short of what retailers are willing accept.
Janelle Chanona, Reporting
Today butane outlets across the country were closed for business as part of a nationwide strike by Liquefied Petroleum Gas importers and distributors.
Roque Reyes, Belize Gas Limited
“We’ve decided to, as long as the Government doesn’t give us what we are asking for. We didn’t cause it, it’s because of them, we are in this crisis. So we are together in this and we are going to hold out until the Government does something about it.”
This morning, representatives of the country’s five L.P.G. importers: Gas Tomza, Belize Gas, Western Gas, Belmont Butane, and Belize Western Energy held a press conference in Belize City in an attempt to justify the nineteen dollar increase they are proposing to consumers.
Jose Mai, Belize Western Energy Limited
“We simply cannot continue Janelle. Our margins have been slashed. Just for example in September there was a hike in acquisition cost, the price remained constant. In October, acquisition costs again went up; Government again did not change prices until the seventeenth of October. That’s more than half of the month and they only did so by recognizing half of the price hike or the cost. We are now in November; another rise in acquisition cost and Government has not budged.”
Miguel Reyes, Western Gas
“We as an industry we have absorbed a lot of increases and a lot of these kinds of added taxation in the industry on a whole and we have tried to hold in because we realize the need of this product in the country, but we have actually reached a point where we are losing money and it’s ridiculous for us to continue losing money.”
According to the businessmen, because numerous attempts to resolve the situation with Government officials have failed, they are hoping the only leverage they have, public pressure, will now force a solution.
Jose Mai, Belize Western Energy Limited
“Shouldn’t butane be considered an essential commodity? Don’t we all need butane? That is not a luxury, we need it to cook. One option could be the elimination of GST. As we have seen, Government has collected more and more GST over the last six months because of the acquisition costs since GST is tied into the acquisition cost as a percentage. So whereas they are collecting more, which is good for Government, but at the expense of importers because the rise in acquisition cost is not formulated properly into the mechanism.”
Miguel Reyes
“When we talk about taking off taxation from the price the first thing we hear is oh no, we ain’t gonna to touch that because if we take it off from here we are going to have to deal with everybody else. That’s the answer we’ve been getting, so it’s like we’ve been hitting a wall for too long.”
The importers say the removal of GST from butane sales would mean a new price of one hundred and seventeen dollars, instead of the one twenty-nine now on the table.
Roque Reyes
“I sympathize with everybody in this country, but the fault is not in us really, the fault is on the Government because they neglected to do what they should have been done.”
Reporting for News Five, I am Janelle Chanona.
While the new price regime proposed by Government has not been accepted by distributors, the costs will take effect on Saturday. In response to the accusations by the importers, this afternoon Financial Secretary Joseph Waight maintained that the control price rises have reflected the average increases in acquisition costs before freight and taxes. According to Waight, some distributors import butane at a higher price than others and while the price controls are not designed to drive anyone out of business, Government’s responsibility is to safeguard the interest of consumers. Waight goes on to assert that in the interest of the consistent rises in petroleum products, there is need for constant review of the situation and Belmopan is prepared to meet with importers to understand the numbers supporting their position. The FinSec says while there is no implication of price gouging, there is a need to satisfy that these costs are the absolute minimum. LPG importers expressed a willingness to meet with government representatives next Monday or Tuesday, but stressed that the strike remains in effect until they get an offer they can live with.
