Shell Bahamas Ltd. broke its silence on Monday on the ongoing feud it has with Bahamasair over a controversial refueling fee that prompted the oil company to discontinue selling fuel to the national airline.
Shell recently made the decision after Bahamasair decided that it will no longer pay the 13 cents per gallon refueling fee that it said adds up to hundreds of thousands of dollars every year.
According to the release from the oil company, Shell is reinforcing its commitment to seek mutually beneficial relationships with the national airline.
ﾓShell Bahamas trusts that its business relations with Bahamasair will soon return to the level of mutual understanding that led both companies to develop the long-term relationship currently enjoyed. It is our custom to engage in open dialogue with all of our business parties and work together to reach satisfactory agreements for all parties concerned,ﾒ the release said.
Shell said there is a misunderstanding on a specific provision of the supply agreement in place for the past years between Bahamasair and Shell.
ﾓShell has been engaged in dialogue with Bahamasair about this matter for quite a while and we continue our ongoing efforts to clarify and settle this issue,ﾒ the release said.
ﾓThe failure to meet mutual expectations and the continued refusal by Bahamasair in complying with full payment of the fuel invoices as detailed in our supply agreement, has caused us to review our commercial relations with Bahamasair. As a result, Bahamasair appears to have chosen to operate with another supplier in contravention of the mentioned agreement.ﾒ
According to Minister of Works and Utilities Bradley Roberts, who has responsibility for the national airline, Bahamasair gave the oil company a 14-day notice to cancel the refueling fee, which he claimed was the highest among other Caribbean countries and Florida.
After the 14-day period had expired, Minister Roberts said that Bahamasair will proceed with legal proceedings against the oil company.
Bahamasair is currently being supplied with fuel from a supplier abroad through the use of a middleman.
Minister Roberts said he is told that there is no signed contractual consent on Bahamasairﾴs part to absorb this fee and all attempts by the airline to have the basis for the fee rationalized and confirmation as to when it will be discontinued has met with abject disdain and flagrant contempt from members of the consortium.
In order to maintain its objective to be profitable in the oil business, Shellﾴs release said, ﾓWe believe in openness and transparency and in this sense we are looking forward to continuing our dialogue with Bahamasair in an effort to reach an amicable and beneficial agreement for both parties.ﾒ
Attorney for the oil company, Campbell Cleare, in an earlier interview with The Bahama Journal said that it was unlikely for his clients to remove the 13 cents refueling fee because that would result in$1 million per year in profit loss.
Minister Roberts has said Bahamasair has been ﾓunduly and unjustlyﾒ charged this ﾓunauthorized feeﾒ since its inception and should be fully reimbursed forthwith.
ﾓIn these times when cost is being aggressively addressed by all airlines, my government cannot allow this to continue,ﾒ he said.
The elimination of the refueling fee is part of what the board of Bahamasair has called an aggressive cost cutting package designed to save the airline millions of dollars.
Bahamasair first started paying the fueling fee in 1995, when the consortium of Esso, Texaco and Shell introduced the fee.
The airline continued to pay Shell for fuel as well as for use of the hydrant system.
However, Minister Roberts explained that Bahamasair never used the hydrant system, claiming that the phase that would render the system adaptable to Bahamasairﾴs use was never installed.
Minister Roberts claims that the consortium would have to reimburse the airline of millions of dollars if a court rules in favor of Bahamasair.
Bianca Symonette, The Bahama Journal
