Posts tagged "bntcl"

  1. Home
  2. Posts tagged bntcl

Sol, the BNTCL Sale and You

What the proposed sale means for Barbadians
At Sol, our customers are our top priority and we have pledged our continued commitment to the communities we operate within. We  are committed to providing you with credible, easily-accessible information surrounding the proposed Barbados National Terminal Company Ltd. (BNTCL) sale.
We have thus far respected the FTC’s investigative process as it relates to the proposed transaction and now that we have received a final ruling, we are reviewing the FTC’s decision regarding the transaction to determine how best to move forward with our proposal to purchase the BNTCL. Below, we are sharing our views and addressing queries as they relate to the transaction as proposed.
1. Will Sol be able to import petroleum products after the privatisation of BNTCL? BNTCL does not import, own or sell any petroleum products — it merely provides through putting services (storage and transfer of petroleum products). Ownership of BNTCL would not allow Sol to influence or control the importation of petroleum products, because this is the responsibility of the BNOCL — a separate, government-owned entity. Sol has not requested any right to exclusively import products as part of the transaction nor does it intend to.
2. Would Sol’s ownership of BNTCL allow Sol to control the pricing of fuel products? No. The pricing of any fuel products is, and would continue to be, the responsibility of the Government of Barbados, through the Division of Energy. If the sale were to be approved, the Government would retain regulatory oversight and control the final pump price to consumers.
3. Would there be any increase for consumers at the pump, as a result of the proposed sale? If there is an increase it would be minimal. For consumers filling up on an average 45-litre tank, the proposed increase in throughput fees would translate into approximately BBD 0.02 (2 cents) per litre on gasoline and BBD 0.014 (1.4 cents) per litre on diesel at the pump. This means that four full tanks a month would result in an increase of less than BBD 5.00 per month to the average consumer.
4. What would be the government’s role in BNTCL after its sale? It has been stipulated in the sale and purchase agreement that the Barbados Government will be issued with a ‘Golden Share’ which would allow it to maintain some control over the use and operation of BNTCL in the interest of the Barbadian public. From the onset of the transaction, Sol has advocated for the regulation of BNTCL’s throughput fees. The Government of Barbados, however, would need to establish the necessary framework for such regulation of BNTCL’s throughput fees post-merger.
5. What structures would be in place to ensure that the current competitive landscape is maintained? Sol has suggested to the FTC (and is open to any suggestions from the FTC) to have conditions imposed on the merger which will address any competitive concerns pertaining to the transaction. Sol is willing to enter into binding agreements with the approved users of the BNTCL terminal and with the FTC in order to set definitive and fair operating standards to which the BNTCL terminal will be bound, and to ensure that all customers of the terminal, including Sol’s direct competitors, are adequately serviced on fair and non-discriminatory terms. 
6. How would the foreign exchange generated by this sale affect Barbados? The sale of BNTCL to Sol allows the Government to realise necessary foreign exchange to bolster a fragile foreign reserve position. As Barbados is currently below investment grade as a result of recent downgrades, an increase in foreign exchange reserves would help investors look more favourably towards Barbados as an investment destination.
7. Will Barbadians be allowed an opportunity to invest in BNTCL?  The sale of BNTCL allows the public of Barbados to participate with a 35% ownership interest through an initial public offering. Under Sol ownership, the BNTCL will be a public company and Barbadians can become investors in its business. This creation of a new public company is extremely significant as it would give Barbadians an opportunity to receive benefits as a result of the sale of the BNTCL.
Our dedication to this country remains steadfast and we will continue to look for ways to better respond to the needs of our most valued stakeholders – the Barbadian people. Sol is, of course, in the business of petroleum, but first and foremost, we are in the business of people.

Read More

Competitor not Disadvantaged

The Sol Group, (Sol) has expressed that the company’s proposed purchase of the Barbados National Terminal Company Ltd. (BNTCL) would not only be beneficial to the country, but that competitors would not be disadvantaged by the terminal’s privatisation.
Word of this comes from Regional Manager of The Sol Group, Roger Bryan, who addressed the Fair Trading Commission’s ruling that the proposed acquisition of BNTCL by Sol, could not be approved in its current form.
“From the outset of this bidding process, Sol has strongly advocated for the regulation of the throughput rate. We have pushed and will continue to push for this because we believe it to be in the best interest of the public, as well as any of our competitors,” stated Bryan. “The appointment of a government-appointed regulator would significantly alleviate concerns pertaining to any perceived dominant market position.”
He went on to state, “We completely understand the FTC’s position on the ruling because, simply put, the Barbados Government needs to create the necessary legislative framework that would support the privatisation of BNTCL, which would include, amongst other things, the appointment of a regulating entity or body over BNTCL post-merger.”
Addressing allegations that the acquisition of BNTCL by Sol, could potentially force competitors into foreclosure in the market, Bryan stated, “the acquisition of BNTCL would not place Sol in a position to force any competitor into foreclosure in the market, nor would we desire to.” He continued, “the terminal’s profit affords the minimum acceptable economic return, and it is unlikely that any company would be able to use these profits to force a competitor out of the market, particularly one with significant financial backing.”
He also added that the Government of Barbados, through its continued ownership of Barbados National Oil Company Ltd. (BNOCL), would continue to control importation rights of petroleum products in Barbados, and by extension, continue to regulate the price at the pump. “The BNTCL is a separate entity to the BNOCL, which controls the price, thus eliminating Sol’s ability to benefit from any perceived vertical integration,” Bryan explained.
When asked about the proposed 32% increase in the throughput rate, Bryan stated that even though the terminal’s expenses had continued to increase in line with inflation rates, BNTCL had not changed its throughput rates since its inception in 2006, resulting in sub-optimal economic performance. “The increase in throughput fees at the terminal would be required to satisfy a minimum economic rate of return on investment. This throughput rate has not been increased over the last 10 years, and the existing rates simply do not provide for any future investments necessary to maintain the safe, efficient functioning of the facility.”
“The proposed 32% increase in throughput rate would result in a nominal increase at the pump of about less than $5 more per month than what consumers pay today. In essence, the price at the pump will go up a bit, but so would the quality of the way the terminal is being run today,” asserted Bryan. “We are pursuing the purchase of BNTCL as a business investment and we want to be up front about that. However, we strongly believe that it is in the best interest of the country.”
Bryan further asserted, “Sol is a Barbadian company, first and foremost, and this very modest increase would help us run a state-of-the-art facility, and the proceeds stemming from the sale would help the government fund other much-needed projects and programmes.”
The petroleum company asserts that the sum offered for the purchase of BNTCL would inject some well-needed foreign exchange into the Barbados economy, at a time where the Barbados economy desperately needs the boost. Barbados’ foreign exchange reserves currently lie below the 12-week benchmark recommended by the Central Bank of Barbados.
The Sol Group of companies operates in 22 countries across the Eastern Caribbean, Jamaica, Puerto Rico, Haiti, Dominican Republic, Bermuda, Bahamas, Cayman, Belize Guyana, Suriname, French Guiana, Martinique and Guadeloupe. Sol supplies fuels, lubricants, bitumen and LPG through an extensive service station network, with marine, aviation and commercial operations.

Read More