Regulator to decide if major oil company can takeover Barbados government’s fuel facility
The sol group of companies, owned by Barbadian business magnate sir Kyffin Simpson, recently struck a deal with government for the purchase.
BRIDGETOWN – It’s now up to the Fair Trading Commission (FTC), to determine whether the leading petroleum in the country can go forward with its controversial plan to take over government’s oil facility.
Prime Minister Freundel Stuart says the utilities regulator has the information about the planned sale of the Barbados National Terminal Company Limited (BNTCL) to the Sol Group of Companies and is expected to announce a decision soon.
The petroleum company, owned by Barbadian business magnate Sir Kyffin Simpson, recently struck a deal with government for the purchase.
However, the move is being highly criticized, with competitor Rubis Caribbean saying it was “not attractive to us at all” since Sol was already the dominant player in the Barbados market; and several groups objecting to the sale.
The Clement Payne Movement (CPM) has written to the FTC, and it has been supported by the island’s newest political party, Barbados Integrity Movement (BIM).
In a letter dated January 25, CPM president David Comissiong asked the FTC to conduct a comprehensive investigation into the proposed sale, with a view to exploring all of the possible anti-competition and monopolistic implications.
He said it was disturbing that “this level of monopoly or oligopoly” had emerged where the fuel retail market here was controlled by a mere two companies – Rubis Caribbean, with 30 per cent share and Sol, with the remaining 70 per cent.
But addressing business leaders at a Barbados Chamber of Commerce and Industry (BCCI) luncheon last week, Prime Minister Stuart said he expected the FTC to give a favourable decision.
“I think that once the FTC sorts itself out and comes to its own conclusions, we should be able to see a clear way forward. I am optimistic that we will get this out of the way,” he said.
Stuart also reiterated that the Barbados National Oil Company Limited (BNOCL) would continue to source, import, own and distribute gasoline, diesel and fuel oil to the local market. He insisted that the BNTCL had always been a private sector entity and all Government was doing was putting it back in private sector hands.
“This has not been traditionally a public sector function. BNTCL replaced another private sector operator, Mobil…What the Government has decided is that this is a traditional private sector activity and there it should go back, and that is the context within which the decision was taken to divest itself of the terminal facility,” the Prime Minister said.
The divestment of BNTCL is expected to rake in about BDS$100 million (BDS$50 million) for the government.