Bahamians paid $12.2 million more to import 25 percent less barrels of oil into the country in the first quarter of 2011, an indication that while Bahamians may have been on a fuel diet for the first quarter of 2011 - their pockets weren't.
Former Chamber of Commerce president and businessman Dionisio D'Aguilar said the fact that the sharp decrease still did not stave off a 7 percent increase in the value of imported fuel could mean other factors were at play.
"[The decline] might be because of less economic activity -- we may be making less and therefore we consume less.  It's probably partially a function of energy consumption, and probably a lot of it to do with the fact that we have less economic activity -- our output of goods and services has reduced, so we are using less oil," D'Aguilar said.  "It could also be [that] people are becoming more sensitive that there are alternatives out there that cause you to use less energy."
He doubts heavily, however, that Bahamians adjusting to the new norm of energy consumption has been a dominant factor in the decrease.
According to the Central Bank, the first quarter of 2011 saw total consumption down by 530,000 barrels, to 1.63 million barrels for the quarter.  For the same period, the total cost, insurance and freight (CIF) value of oil imports grew by $12.2 million to $177.7 million, according to the May 2011 quarterly statistical digest.
"Motor gasoline" was behind much of the fall-off, down 264,000 barrels or 68 percent for the first quarter.  "Gas oil", or diesel, saw a 42 percent fall-off to 410,000 barrels.
The statistics may factor into government calculations as it determines how to adjust margins on gasoline and diesel to allow operators a better return on their operations. Environment Minister Earl Deveaux announced last week that changes were in the pipeline for the sector.
Currently, retail distributors get $0.44 cents per gallon on gas and $0.19 on diesel.  The numbers suggest that for the first quarter of 2011 they divvied up $170,720, $116,160 less than they did for the first quarter of 2009.  For diesel the numbers suggest $77,900 taken in the first quarter of 2011, down $32,870.
If consumption remains reduced, the reduced demand may not support the same number of operators in the market.  The quarter's figures may suggest considerable price elasticity of demand - meaning as prices climb, Bahamians really will reduce demand accordingly.  Typically, the summer months see the fuel prices climb.  If operators secure higher margins, that will likely send prices up too.  It could mean further reduced demand, or at least very little strengthening all things remaining constant.
Government revenue likely took a hit from the reduced import numbers for the quarter.  Despite having a bit of a 'cushion' in stamp duty, which is based on a percentage of fuel cost, much of the revenue is also a flat margin assessed on a per-gallon basis.
 
 

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