Dealers concerned over Sol’s high priced kerosene

Jan 09, 2009 News

– company’s head insists fuel purchased at high price

A shortage of kerosene should have never been experienced in this country since substantial amounts of the commodity have been and still are in stock at the Sol Guyana Incorporated Bulk Terminal located at Rome, East Bank Demerara.
This disclosure was made recently by an individual close to the local fuel industry who is of the belief that there would not have been a shortage of the fuel if Sol had opted to drop its stipulated high price on the product.
It was revealed that while the average price tag for a gallon of kerosene is in the vicinity of $480 and $500, at Sol the price is a whopping $1,127 per gallon, a price which was confirmed by a sales representative at the oil company.
Of recent, customers of kerosene, one of the cheapest fuels available, have been faced with the challenge of acquiring it.
Reports are that the Guyana Oil Company (GUYOIL) had run out of the much needed fuel and was awaiting a shipment, which according to reports has since arrived but has already been depleted. And even the supplies at the various Texaco Service Stations have been depleted.
According to one retailer, Texaco had informed that a shipment of kerosene had arrived on Wednesday but tests were being carried out to ensure that the product is of an optimum quality.
Sol Guyana Inc, on the other hand, never had a shortage of the fuel, a revelation which was confirmed by Head of the company, Ken Figaro yesterday.
Figaro, who returned from his Christmas vacation just a few days ago, admitted that while it has been observed that there has been a shortage of the fuel on the local market there is very little that the company can do to help address the problem.
According to Figaro, Sol had acquired its supply of kerosene at a time when the fuel price had escalated to almost three times the current price.
He pointed out that since kerosene is a very slow selling product, Sol was stuck when a large quantity even after there was a rapid reduction of the price of the fuel, adding that by that time the other companies had probably exhausted their high-priced supply.
And since the evident shortage of the fuel on the local market, several dealers had approached the oil company to rethink its pricing of the fuel. But according to Figaro, Sol will be operating at a loss if it decides to lower its fuel in order to satisfy the request of the dealers.
“We do understand that customers want the cheapest possible price but we have to consider our acquisition cost…If we sell at the current market price it would take us several years to recover our losses,” Figaro insisted.
According to him, this situation was explained in detail to the dealers. He added that the company had done an in depth analysis of the whole scenario.
It was discovered, Figaro said, that if the Sol decides to reduce its price in order to compete, the other oil company will also reduce theirs, causing Sol to plunge into a deeper dilemma.
As such Figaro is of the opinion that the company has made the best possible decision not to reduce its current kerosene price.
“We have to look at demand and supply. We are not gouging; we can’t just reduce our prices. We have to look at the market situation and if the dealers want they can buy what we have to offer… “
However, Figaro noted that the company will be reviewing its current standpoint on the fuel price and will revise it if such a move is deemed feasible enough.

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