There was a special sitting of the House Of Representatives today in Belmopan - and one of the main pieces of business was the passage of a Supplies Control Amendment Bill to put a hard ceiling and floor on the price of butane, or LPG gas.
As we told you a few weeks ago, the price was firmly fixed to deter a practice which is known as predatory pricing. That's where the Mexican companies who are the major retailers - and also the country's sole suppliers and importers lowered the price to consumers - so low that the Belizean butane vendors like Brown's Butane could not compete with the lower price.
That's called predatory pricing, and government introduced a law today to make it illegal. As expected, the PUP said Belizean would rather lower prices to price controls. Here first is the government's explanation of why it became necessary to restrain the butane cartel - a group of companies all owned by one Mexican family:
Hon. Tracey Panton, Minister of State - Trade
"They are now selling at below the acquisition cost price and they are undercutting and undermining the retail sector. we have made a decision as a government, having listen very keenly to the retailers that we have decided that we will ensure by whatever measure we can that they will respect the pricing scheme that is enshrined by law in this country, that they will respect the laws of this country and when they fail to do so, they will be penalized based on the new amendments that are outlined in this regulation."
Hon. Rodwell Ferguson, PUP Stann Creek West Area Rep.
"And now the government will control the price of liquid petroleum gas I think at $4.50 per gallon. While there were some suppliers selling below $4.50, that was of the best interest of the poor people."
Hon. Kareem Musa, PUP Caribbean Shores
"I believe that this particular act is a direct assault on the vast majority of poor and middle class Belizeans, because they are the consumers of butane and even if it is only for a very temporary short period of time that the distributors in the city and in the country are providing this reprieve, this discount, this low price of butane, why are we attacking the poor people especially at this time of the year. So we know that there will be a national gas company next year, but the distributors and suppliers right now are dropping their prices. I think what this is, is the government trying to save face of the very embarrassing situation that would take place next year when they hike up the prices, when this national butane company introduces very high prices for butane."
Hon. John Briceno, PUP Leader
"I've heard government's protecting the consumers from price gouging, wanting to make sure that the suppliers will not take advantage of the consumers. But I think this is the first time I am hearing that the government is protecting the suppliers that they cannot go below a certain price. This is madness Madam Speaker especially during these times Christmas times, everyone will do a lot of cooking, a lot of baking and yet the government would not allow the competition to reduce the price."
Hon. Cordel Hyde, PUP Area Rep., Lake Independence
"You know how many ordinary people every day have to come and try to get a little money to put back butane in their tanks? And now we are in a situation where the prices is falling down and we are crying because the prices is falling down. Now what this reveals is that this government, in fact successive governments have fallen asleep at the wheels, because `If these importers/distributors/retailers can bring down the price of butane to this low it means they could have been doing it for many years. It means that the ordinary people of this country have been fleeced, have been shafted. I am not in the business of being shafted. Don't come to tell me it is some new people will shaft us, it is locals that will shaft us, it is not foreigners who will shaft you. I don't care who it is, I don't want anyone to shaft me."
Rt. Hon. Dean Barrow, Prime Minister
"They decided they would take a loss. Why? Capitalists are rational and that doesn't seem rational. The whole idea is to drive all the local retailers out of business. When we met with those 25 retailers, some of them were next to tears. The predatory pricing have been in effect for maybe a week or so already and there were people saying we have our loyal customers, but they can't fool with us, because we have not been able to sell 1 tank of gas, because of what the Mexican mafia (maybe I shouldn't say that), because of what this family monopoly is doing. Then when every one of the 25 plus Belizean retailers would have been driven out of business - when they came to us, some of them were on the point of shutting down. What you think these people who controls everything would have done? They would have then taken it up 3, 4, 5 times above the market thing and when it is the Ministry's duty to do, when the ministry would have said to them, no, you can't sell - then they would cut you off. Then we will not import. They have done it before."
"This bill is a kind of companion piece or an extension to an S.I. which is being pass which SI will give the Supplies Control people power to seize the stock of those importers if they play the fool and not follow the law and keep threatening us about cutting us off. This is comprehensive effort, a comprehensive initiative on the part of this government to make sure that this predatory pricing will not continue, that they will not drive our suppliers out of the market. If you think that they are going gently into that good night think again because we are preparing for war and we are making sure that we have a proper arsenal, we have a proper armory, proper set of weaponry so that we can grab the knife here, grab the sword here, pick up the gun here, take the bow and arrow."
"Sir, Mr. Leader, you go talk to those 26 retailers who are on the verge of tears, who are saying we are being driven out of business. They would have exited the business, so that they would have try to start up again 6 months from now when the national gas company starts."
As you heard there will be further legislation via SI to further discourage predatory pricing.