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Esso closure sparks industry outrage

JEFFREY TODD
Guardian Business Editor
jeffrey@nasguard.com

Published: Dec 05, 2012

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Gas retailers are once again up in arms over alleged mistreatment by oil and gas suppliers after yet another Esso on the Run station bit the dust this week.

The station, located near the Harbour Bay Shopping Centre, reportedly employed 20 Bahamians.  Owner Richard McCombe confirmed the closure, but could not provide details as he wraps up the process.

“I have sent correspondence to Esso, and have not heard back from them,” he told Guardian Business yesterday.  “I have moved out though.”

The Bahamas Petroleum Retailers Association, however, claims this latest closure is just one incident within a much larger trend.

President of the association, Phillip Kemp, cited a number of stations that have closed down or traded hands in recent months, including locations on Carmichael Road, Prince Charles Avenue and East Bay Street.

“It's ridiculous.  They (Esso) are not business partners,” he said.  “It is economic slavery.  There is no win-win.  It's win for them and lose for you.  Retailers are in debt over their heads and people are afraid to get out because they don't know how to service the debt.”

The strong language from Kemp is reminiscent of grievances expressed by the association last year.  Back then, retailers lashed out at Texaco for similar reasons, namely that the corporation is too rigid, imposes high overhead and franchise fees and fails to provide proper maintenance to the facilities.

Texaco in The Bahamas has since been acquired by French multinational RUBIS.  Its retailers have been reporting far better treatment.  But for Esso dealers, the fight seems to be just beginning.

“It is the whole system that is impossible to bear with.  Esso is a completely different animal,” he told Guardian Business. “When you're the bully in town, you do whatever you want.  For years this has been going on and nobody wants to deal with it, despite the fact you have families bankrupt.”

One Esso retailer, who wished to remain anonymous, said he is now grappling with the decision to close up or risk bankruptcy.

While getting “two pennies on the dollar is better than nothing”, he feels frustrated by the lack of compassion by Esso, which is owned by powerful global corporation ExxonMobil.

As an example, he cited the disastrous road works project in New Providence as having a major impact on some stations in terms of gallons sold.

He told Guardian Business that no allowances are made for such unforeseen circumstances, which are at no fault of the retailer.

“They don't see anything other than shareholder value.  There is no humanity there,” he said.

The association threatened to strike last year over low margins and poor treatment by oil and gas companies.  It is unclear whether these latest grievances could spur similar acton in the future.

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