Published On: Mon, Jul 3rd, 2017

Regulator says no to Barbados government’s plan to sell oil terminal

fair-trading-commission-ftcBRIDGETOWN - The proposed sale of the Barbados National Terminal Co. Ltd (BNTCL) to regional petroleum giant Sol, which was expected to pump desperately needed foreign exchange into the economy, is now in serious doubt after the island’s regulator objected to the deal.

In a preliminary ruling dated June 14 and obtained by the Nation newspaper, the Fair Trading Commission (FTC) said “it is of the view that merger should not be permitted.”

The Sol group had made a bid to purchase the state-owned oil terminal – which manages the importation and supply of gasoline, diesel and fuel oil – for more than US$100 million, but it was stopped in its tracks by competitor RUBIS which took to the law courts to challenge the sale. Rubis secured an interim injunction barring the sale, which it argued would create a monopoly.

The company also filed an application in the High Court for judicial review of a decision to approve the inclusion of a 15-year moratorium clause in the Sale and Purchase Agreement between a Sol Subsidiary and the Barbados National Oil Company Limited (BNOCL), BNTCL’s parent company.

The FTC found that sections of the proposed sale bid would hurt competition and were, in fact, unlawful. It made particular mention of a controversial moratorium on construction of new terminal facilities or new import deports. The regulatory body described the moratorium as “inherently anti-competitive” and restrictive, as well as contrary to the FTC Act and the Fuel Adjustment Act.

The Commission also raised concern that the proposed BNTCL sale would give Sol an unfair advantage, dampen the market, and possibly result in increased costs for consumers.

The FTC had given the two disputing oil companies, Sol and Rubis, until June 30 to respond to the initial ruling. It is not clear whether they have responded.

In last month’s Budget presentation, Finance Minister Chris Sinckler said the cash-strapped Freundel Stuart administration was banking on the BNTCL deal to go through as it seeks to erase a $537.6 million shortfall.

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