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Sunday, September 27, 2020
Home Editorial GoB didn’t have to close the valve on cheaper LPG

GoB didn’t have to close the valve on cheaper LPG

Belize’s leaders said that the LPG (liquid petroleum gas, also known as butane) importers/distributors (call them monopoly), who recently lowered the price of the product, had a foul motive, which was to run small distributors out of business, hence the GoB’s move to halt the sales of the cheaper LPG. Let’s get this clear: the government could have protected small distributors without denying cheaper LPG to thousands of households and hundreds of businesses that use the product.

The GoB panicked, but they deserve applause for wanting to protect small LPG retailers. It is not usual for them to show this kind of concern. Our leaders not only did not protect small, traditional sellers of Boledo: they also facilitated the chiseling of small sellers out of that business, and they did not step forward to protect small tour operators when wealthy people cut into their share of the tourism industry.

We must be grateful for small mercies, such as this — the GoB stepping forward for small retailers of LPG. The complaint here is that to that end they didn’t have to deny consumers a little break, especially in the demanding, stressful month of December.

Reports are that the monopoly significantly reduced the price of LPG, and on the Senate floor we heard from GoB senators that in Dangriga the monopoly actually gave away LPG free for two days. The small retailers had no choice but to complain to the GoB.

The government responded by setting a floor price for butane, and upping the penalties for anyone who violates the laws that control LPG. The government is also passing a Statutory Instrument (SI) to give government the right to seize LPG stocks if the monopoly pulls the plug on the supply.

On the Senate floor on Friday, GoB senators said the government had to react the way it did because the monopoly plays hard-ball, and in the past they have dictated to government at what price they would sell the product. We remember well what we were told. The monopoly put the GoB over a barrel and more or less said: do as I order or I will shut down butane supplies in the country. We also remember our feeble response.

LPG is not electricity, telecommunications, or water: it doesn’t have that kind of leverage. When the monopoly did that (if they did), the government could have done what it spoke about on Wednesday — reach for an SI to give the government the power to take control of their stock. That is a last resort, however, to be avoided as much as possible.

There are times in the year when we definitely would not want any disruptions in the supply of LPG. When the monopoly threatened to cut the supply, the government could have picked the moment to call them in and explain how business would be conducted in the future. If they balked, the government wouldn’t have needed to take control of their stock.

One of the outstanding leaders of the cane farmers, Mr. Alfredo Ortega, told our leaders that they and their families were ready to eat only tortilla and beans if that is what it took for farmers to get a fair share of the sugar cane industry. If the monopoly had frozen the supply of LPG, we would just have had to cook our tortilla and beans over a fire hearth, on kerosene stoves, on hot plates, even in microwaves, for a short while.

We could have gotten another supplier from Mexico. If that didn’t work out, an express ship from Florida or Texas only takes two to three days to reach Belize, so we could have had a new supply of LPG in Belize in that time. We would have needed a few used LPG trucks to distribute the gas. Those can be purchased for between BZ $50,000 and $100,000 each in the USA.

We would have had to pay to keep a ship in port for a while, until we got the business under control. The costs would not have been exorbitant, however, because any old ship could have brought some tanks loaded with LPG. The biggest cost for us would have been a little inconvenience.

In the recent case where the monopoly was selling cheap LPG to consumers, for their reason(s), all the government had to do was make up the difference with the small distributors. The cost to government would not have been excessive in the short term.

The government is on solid ground to arm itself with an SI that allows it to take control of LPG stocks if there is any foul play now. There is a new LPG company in town, the National Gas Company, and the monopoly players will be losing a major share of the business. They will want to try and extract as many concessions as they can while they still have complete control of the business.

Hurriedly setting a floor on the price of LPG wasn’t the only uninspiring decision of the GoB last week. We really have to wonder what they were thinking when they came up with their new gill net solution. There were Oceana and other NGOs standing on the side with a couple million dollars and a plan to help gill net users phase out this fishing tool, and the GoB whiffed.

Why does the GoB continue behaving as though taking away gill nets will destroy the livelihoods of fisher folk who use them? Most everyone knows that gill net users in Belize don’t depend solely on that tool to make a living. People in the fishing industry also use fish and lobster traps, fishing lines, hook sticks, and they dive conchs.

The government says that with its 25% share in the new company, these LPG troubles will be a thing of the past. We don’t know of any company where a 25% shareholder exerts the kind of control the GoB is suggesting here.

The GoB always knows what the acquisition cost of LPG is. Regular folk can find that on the internet any time of the day. On December 2, 2019, indexMUNDI (indexmundi.com) reported that the propane spot price FOB at Mont Belvieu, Texas, was US$0.54 per gallon. The business of LPG is public knowledge. If we have been fleeced it is because our GoB allowed it, for their reason(s).

The government had no need to move to set a floor on the cost of LPG so quickly. If the distributor wanted to thank the Belizean people, after fleecing them (as our government said) for so long, and their give-back was cheap LPG, all the government had to do was guarantee small retailers of protection.

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