PM Defends Cut to Fuel Dealer Margins

Prime Minister John Briceño has defended the government’s decision to reduce fuel dealer margins, saying that with prices at the pump reaching as high as fifteen dollars per gallon, all parties in the supply chain must share the burden and signalled that major oil companies operating in Belize should be next to make concessions.

“As a government, we feel that everybody has to do their part. Consumers are doing their part because they’re paying more. The government has been cutting taxes. So it was only reasonable or fair for the dealers also to take a cut,” Briceño said during a morning interview.

The cut reduces the dealer margin to just under a dollar per gallon. The Prime Minister acknowledged that dealers would prefer a higher margin but said the current situation, in which high global prices had inflated margins far beyond what was envisioned when the formula was established in 2004, was no longer sustainable.

“It was never foreseen back then that the prices would go to thirteen and fifteen dollars. So the higher the price was, the bigger their margin is,” he said. He also cited a message he received from a former Texaco executive noting that Belize had some of the largest dealer margins in the region due to price levels.

Briceño then turned his attention to Puma, Sol, and other companies, suggesting they had been increasing charges to dealers, such as rent and store sales percentages, as prices rose, effectively absorbing a portion of the margin. “I think it is also incumbent on the companies to make some adjustments, and maybe that’s a discussion we’re supposed to be having,” he said.

On the question of whether the government breached the 2004 agreement with dealers, Briceño was candid. “We could argue every day whether we did or not. The point is we need to set the price,” he said.

He acknowledged that dealers had sent correspondence to his administration but said he had not yet seen it. “I believe that cooler heads will prevail. I don’t see them wanting to close down their gas stations,” he said.

The Prime Minister also disclosed that the government has cut more than sixty million dollars in fuel taxes so far this year, with total cuts projected to reach between sixty and eighty million dollars. He said the government would continue to bring prices down as global conditions allow, and that fuel tax revenues would need to be partially recovered to sustain social programmes. “Free education, scholarships, the feeding programme, housing for mostly single mothers — we have to help the poor people,” he said.