[OPINION] Bahamas Minister Leslie Miller has Chutzpah. From a press release on the PLP website, “Minister Leslie Miller on Monday announced a new round of gas price increases, indicating that one company has received approval to raise the cost on a gallon of gasoline to $4.77.
Approval from whom? The press release is silent on this because the “approval” was given by the Bahamas government.
Again quoting the press release: “These increases are truly amazing, since prices in The Bahamas are going up by more than 75 cents while prices in Florida reduced by about six cents on the weekend,” the Minister said.”
“Amazing?”
Bear in mind that the Bahamas government initiates price controls — regulates how much profit gas merchants can make — and that the final price of gas in the Bahamas is set by the government. In fact, one dollar or more of what Bahamians pay for a gallon of gasoline goes into the government’s coffers. That’s why gas is over $4 a gallon here when it is less than $3 a gallon in Miami. This duty money goes to pay the salaries of Ministers who give us such wisdom as that the price increases that he approved are “amazing.” (Less than half that amount goes to the local suppliers–which begs the question: who is the real one guilty of “gouging”?)
In the long run–barring government intervention–the price of energy will drop as supply increases due to the new entrants who enter the energy market who are attracted by the higher than normal profits in the energy industry. Unfortunately in the Bahamas, the number of entrants is limited by the Bahamas government.
What should the government do? For starters, the government should drop the tax on gasoline which presently is around $1.07 per gallon (this figure does not include the stamp tax). Secondly, the government should outlaw fuel monopolies that exist in the Bahamas that keep prices high. It can so this by permitting the free entry of more competitors into the Bahamian gas market.
Of course, with less funds expropriated from the Bahamian public through taxation, politicians will have to cut back on their expenditures — which means less “free lunches” for their political supporters who fund their campaigns for political power.