Prime Minister Gaston Browne plans to ask commercial banks to temporarily reduce card-processing fees for fuel purchases as the Government considers measures to ease financial pressure on service station operators.
The proposal would see processing fees charged on debit and credit card purchases reduced from approximately 3.5% to 1% during the current period of higher fuel prices.
Director General of Communications Maurice Merchant said the plan emerged from discussions between Browne, seven service station operators and several fuel haulers after a number of stations temporarily stopped operating.
The operators later agreed to reopen following assurances that their concerns would be considered.
Their action came after increases in the retail prices of gasoline and diesel took effect on Sept. 1. The Government said it had absorbed rising international petroleum costs for several months to shield consumers from the full impact of higher prices.
Browne told Cabinet that he considered the dealers’ concerns reasonable and believed the Government and operators should work together to determine what relief could be provided.
A major concern is the growing number of motorists using debit and credit cards to purchase fuel. Operators said fees deducted by banks and card companies significantly reduce the limited profit they earn from each sale.
They also cited rising labour and other operating costs. While welcoming the Government’s increase in the national minimum wage, the operators said the resulting adjustments across their businesses had increased expenses and further reduced profitability.
Browne is expected to engage the country’s commercial banks and the West Indies Oil Company on the temporary fee reduction. Cabinet believes the measure could provide immediate relief to dealers without transferring the full cost of their financial pressures to motorists.
A special review committee will also consider increasing dealers’ profit margin from the existing 12% to 15%.
The committee will examine the financial and operational circumstances of service stations, including card-processing charges, wages and other expenses. It will also consider the need to protect consumers from unnecessary increases at the pump.
The review is expected to be completed within 90 days.
Merchant said the Government has consistently sought to keep fuel prices in Antigua and Barbuda competitive with those elsewhere in the Eastern Caribbean Currency Union.
Before the latest adjustment, gasoline was reportedly priced at EC$14.50 per imperial gallon, compared with an ECCU average of EC$17.66. Following the Sept. 1 increase, gasoline in Antigua and Barbuda is now EC$16.50 per imperial gallon, which the Government said remains among the lowest prices in the currency union.
This article was originally published by Antigua News Room. Read the original article here: PM to Seek Lower Bank Card Fees as Government Reviews Fuel Dealers’ Margins.