Wed | Dec 7, 2016

RUBiS dealers facing injustice, says JGRA boss

Published:Friday | December 26, 2014 | 12:00 AM
Leonard Green, president of the Jamaica Gasolene Retailers' Association (JGRA).

Christopher Serju, Gleaner Writer

The Government's preoccupation with attracting and facilitating foreign-direct investments (FDI), at the expense of local business operators, is at the root of an ongoing impasse between the French-based RUBiS petroleum marketing company and its dealers, according to Leonard Green, president of the Jamaica Gasolene Retailers' Association (JGRA).

"If you dig down into this story, you could be unearthing one of the biggest injustices ever in commercial relationships in Jamaica," Green told The Gleaner on Tuesday.

He charged that RUBiS dealers are being subjected to unreasonable business practices and have no one to turn to for help, as the marketing company is operating with scant regard for local, established business practices.

"For too long, successive governments have been concerned about FDIs rather than building our own capacity as a country and empowering Jamaican entrepreneurs," he told The Gleaner. "What we do is we divest our interests to all of these multinationals and leave our people at their will. So the truth of the matter is that the Government needs to do something about the relationship between the marketing companies and the dealers, who are all Jamaicans."

FRANCHISE FEE TRIPLED

Green charged that for years, petroleum-marketing companies have been abusing their exemption from the Rent Restriction Act, citing a 300 per cent increase in franchise fees which will have to be paid in American dollars as part of the new controversial contractual arrangement.

"So all that happens is that when the Government puts the spotlight on them, in terms of the margins they are pulling, all they do is raise the rent to the dealers and we can't do anything about it."

In addition, the dealers are being asked to pay in advance for petroleum, even though RUBiS still enjoys a credit arrangement with the State-run oil refinery Petrojam.

Then there is the requirement that dealers pay over an estimated two-month deposit of their electricity bill, to the petroleum company, which the JGRA president contends is illegal.

Describing the contract terms as one-sided and oppressive, Green said an appeal to Energy Minister Phillip Paulwell had yielded limited success.

He said: "They wanted to implement on the 15th of December. However, Minister Paulwell intervened and asked them to reconsider, and the only thing that they have considered is extending the time until the end of December."

GOVERNMENT INTENDS TO PLAY ROLE

Meanwhile, Paulwell disclosed that, in further talks with RUBiS, he would be guided in part by the findings of an analysis of the petroleum industry conducted by the Fair Trading Commission (FTC).

"We do intend to play a role," he admitted. "Even though we do need to understand that the bottom line is that they are contracted parties and we don't want to, in any way, affect too much the situation with contracted parties.

However, the minister hinted that RUBiS's business practices would likely come under the microscope.

"We believe that there are some ground rules that people who are actually operating in Jamaica ought to abide by and we are also making sure that we can influence that based on some of the findings of the FTC."

Earlier, in a press release, the JGRA had declared that it "decries the rude and obnoxious treatment of RUBiS dealers by the management of their French-owned marketing company, RUBiS Energy Jamaica Limited".

The dealers have been flying black flags at the more than 50 RUBiS stations across the island, as a symbol of their rejection of the marketing company's pending decision and to bring public attention to the matter. The JGRA has advised that if RUBiS does not relent, it will initiate a series of protest actions leading up to the start of the new year, which could culminate in a disruption of fuel sales.

The JGRA president said the woes of the original Shell dealers have been made worse by the rapid change of marketing companies which span at least three over the past five years - from Cool Petroleum, to the Antilles Group, and now RUBiS.

christopher.serju@gleanerjm.com