International reports indicate that a barrel of crude oil could rise as high as $70.85 a barrel within weeks, which could drive the cost of gasoline in New Providence to $5 per gallon and up to $7 per gallon on the Family Islands.
Chief Price Inspector Sidney McKenzie is encouraging Bahamians to conserve gasoline.
“Whenever the United States is affected The Bahamas will feel the pinch because we all purchase gasoline from the same places. And as you can see the prices are spiraling upwards and it will be no getting around that,” Mr. McKenzie said.
He said nothing could be done to bring down gas prices because “once the oil companies purchase the gasoline at that cost they must resell it to the consumers at a price that will not lose profits for the company.”
Mr. McKenzie added that based on reports that he has received, gas prices are not expected to drop anytime soon.
He said that with crude oil already breaching the $69 mark, it was likely that within another week it may top $70 per barrel.
Mr. McKenzie said as of last week there were no new submissions for gas price increases; however, he said the Freeport Oil Company Limited (FOCOL) has already indicated that a request for an increase would be submitted this week.
He anticipates that other oil companies will follow suit.
“The last time we signed off on an increase was two weeks ago and that drove the cost of gas to over $4. So I expect within short order, during the oil companies’ next shipment, the companies would make the request for the increase,” Mr. McKenzie said.
Fuel is shipped in from Venezuela to The Bahamas every 21 days.
Current gas prices in New Providence are: Shell, $3.96 per gallon; Texaco, $4.02 per gallon; and Esso, $4.09 per gallon.
Meanwhile diesel prices are: Shell, $3.34 per gallon; Texaco, $3.27 per gallon; and at Esso $3.18 per gallon.
Gas prices in Eleuthera and Abaco have already surpassed $5 per gallon and other islands are expected to soon follow.
The projected crude oil increase could also result in electricity costs rising during the summer months.
Gasoline futures rose further last Wednesday after the United States reported a large drop in gasoline inventories, adding to supply worries that have already been heightened by political turmoil in Nigeria and Iran, which are two of the world’s biggest oil producers, according to international reports.
As the summer driving season approaches in the U.S., officials have indicated that gasoline prices are expected to soar as refineries are still recovering from the hurricanes that struck the U.S. Gulf Coast last year.
In Iran, crude oil per barrel was pushed to $70 on Monday. This is the first time in seven-and-a-half months that Iran has experienced the hike in oil price. The last time crude surpassed $70 a barrel was last August.
By: Bianca Symonette, The Bahama Journal
