GASOLENE retailers are again up in arms, this time over what they say are continued unfair pricing practices of petroleum marketing companies, which they fear could force some of them out of business.

The retailers have accused the companies of not passing on the full cost of the reductions and discounts they receive from Petrojam, the state oil refinery, and allege that it has been the case for at least four to six months.

“We notice that when there is a reduction in prices, the prices are not passed on to the dealers in terms of the full reduction,” President of the Gasolene Retailers Association (JGRA) Leonard Green told the Jamaica Observer.

“The marketing companies continue to hold some of those reductions, increasing their margin and passing on what they feel like to the dealer network. It puts the network in a crisis because the market is expecting the price to move relative to the reduction at the refinery. When they do not see this movement, they accuse the dealers,” he complained.

Green argued that this type of unpredictability, while retail margins are being compressed, is forcing the dealers into a corner, and rendering them uncompetitive.

“Some of our dealers have had to be absorbing these retentions by the marketing companies. Although the marketing companies have only passed on $1.91 in the last instance to the dealers, they have had to pass on the full $2.91 to the market,” he said.

The JGRA president said the dealers want the companies to immediately desist from the practice and come up with a proper pricing mechanism.

“And if it is going to be changed, they need to advise the market and advise their dealers. That is what is required to build confidence in the system at this point and to allow stakeholders some amount of predictability of pricing. As it is now, we are not able to forecast our usual accounting ratio at this time,” he lamented.

Green said that so far one company has indicated that it wants to have one-on-one meetings with the affected dealers, but the JGRA is against the move, calling it “a divide and rule” method.

“That is not acceptable because we are a members’ organisation and the members have raised the concern to us. We have dutifully forwarded those concerns to them and they ought to respond to us on this matter. The dealers are very uncomfortable about dealing with the marketing companies on certain issues, including this one,” he stated.

The retailers have another lingering issue with the marketing companies — that of new contracts which were to take effect in January, but which were stayed after dealers objected to the terms and threatened to shut down the retail trade.

Retailers complained then that the contracts were onerous and unfair, and following the intervention of the energy minister, Phillip Paulwell, a code of conduct to guide contractual arrangements between the parties was put to the Fair Trading Commission (FTC) for review.

Green is dissatisfied that the FTC has not yet made a final decision, and blames the delay on lack of cooperation by the companies.

“The FTC has spoken to the retailers and other stakeholders, but the marketing companies have been very reluctant to cooperate with the FTC. We are saying to the FTC: “having given them so much time to give you their response, why don’t you move ahead and make your recommendations based on the evidence that we have provided? he queried.

He said in the meantime, the companies are trying to “coerce and in some instances pressure” the dealers to sign these contracts, as , among other things, access to capital financing has been stymied because the dealers continue to operate under the old contracts.

“It’s a grave injustice because many banks require current leases…the bank is pressuring the dealers for these arrangements to be formalised and the dealers are not able to meet these requirements. Many are suffering right now because they have not been able to access financial support,” he said.

Executive Director of the FTC David Miller told the Observer that the code of conduct is still in draft format, but that the commission should be “tying it up” before the end of this month.