THE head of Rubis Caribbean is again raising concern about the planned sale of the State-run Barbados National Terminal Company Limited (BNTCL) to oil company SOL, and hopes that the Fair Trading Commission (FTC) takes all the factors into consideration, including SOL’s “extremely dominant position in the market”, in order to make its ruling.
At a news conference held at Rubis’ fourth floor offices of the International Trading Centre in Warrens yesterday, Chief Executive Officer Mauricio Nicholls explained that with SOL commanding almost two-thirds of both the retail market and the jet fuel market and having a monopoly on the market for marine fuel, if the sale of BNTCL goes through it would make that company, which already enjoys a very dominant position, an “even stronger competitor”. Moreover, should the sale go through, Nicholls said his company would be reliant on the same competitor for its fuel supply, a practice he explained that is uncommon across the globe.
“The sale of BNTCL to SOL puts Rubis in a very uncomfortable position of relying on SOL … for the importation of our jet fuel to supply the airlines, for the supply of gasoline and diesel. So as an example, all of our fuel trucks would have to be loaded in a terminal that is owned by SOL and that is something that is not attractive to us at all,” he stated.
He lamented that where one player in the market is offering ter-minal services to the others, they can, and in most cases, adopt practices and policies which benefit the terminal, giving preference to their business. But Nicholls said were this to happen, it would go against what the BNTCL was initially created to do – give equal access to all the players. He said while he was not suggesting that the proposed owner would go the route of preferential treatment for its business, should they do so, it is likely to have an impact on the Rubis’ sales and their ability to serve consumers.
“It represents a huge risk to us having that terminal owned by our only competitor here in Barbados, who already has a very dominant position in the market. It is very difficult to regulate these things. The FTC is an avenue for grievance, so when somebody abuses their dominant position you can go to the FTC to complain that that abuse is taking place. But I would suggest to you that when that abuse takes place it is too late, that abuse has already been caused. You can’t go to the FTC to complain that these abuses may happen, you actually have to go to them when there is evidence that the abuse has happened. And that is usually very difficult to prove,” he explained.
His comments came as he said that Rubis is still of the belief that the sale of BNTCL should be joint, with both SOL and Rubis holding stakes in the company. Nicholls contends that this would be the best outcome for Barbados. This is an idea they put forward to the Government, but one he lamented was not accepted. He made the point as he revealed that had Rubis been successful in the bid they made for the terminal, included in that was an offer to sell a stake in the terminal to SOL.
“That has been our position from the get-go. We did not want a monopoly situation, our preference would have been a jointly-owned terminal,” he stated.
With that in mind, he said Rubis is ready to contribute any information that would be required by the FTC, to help them make well informed decisions regarding the proposed transaction. (JRT)
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