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Bahamas: Cost of Living Soars For Bahamians
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Cost of Living Soars
By Candia Dames -
Nassau, Bahamas:


Bahamians are paying more for everyday goods and services as the cost of living continues to climb amid weakening economic growth.

As an example, the Department of Statistics says in its latest consumer price index report that Grand Bahamians paid 21.19 percent more for electricity in the month of November compared to the previous month.

New Providence consumers also saw a continued increase in the Consumer Price Index during that period.

The report says the Consumer Price Index for Grand Bahama showed "a considerable increase" and the CPI for New Providence also "moved forward."

In New Providence, the major groups that helped moved the CPI forward were: clothing and footwear, medical care and health and food and beverages. Increases were also noted for transportation and communications, housing and other expenditures.

In Grand Bahama, the housing index was the leading group with an increase of 4.21 percent. This was followed by food and beverages and transportation and communications. Other major groups such as medical care and health, recreation and entertainment and other expenditure also showed an increase.

The report says the food and beverages index increased as items such as tomatoes rose 66.12 percent; limes/lemons, 28.58 percent; onions, 14.88 percent; grapes, 14.32 percent; bananas, 13.41 percent; lettuce, 12.41 percent; nuts, 9.10 percent; plantains, 6.98 percent; fresh peas and beans, 6.88 percent; canned and packaged soups, 6.16 percent and avocados, coconuts and other fresh fruits, 3.59 percent, also helped propel the index forward.

The increase noted in the transportation and communication index was attributed to the cost of gasoline, oil, grease and fluids increasing 1.94 percent.

In New Providence, consumers paid 33.40 percent more for tomatoes; 28.61 percent more for grapes; 20.05 percent more for lettuce; 19.10 percent more for avocados; 9.22 percent more for grapefruits; 8.82 percent more for pineapples; 7.42 percent more for sweet peppers; 4.35 percent more for bananas; 3.32 percent more for margarine; 3 percent more for butter and 2.58 percent more for canned fish and seafood.

New Providence consumers also paid 10.5 percent more for clothing and footwear, and 10.06 percent more for hospital and medical services.

HIGH ENERGY COSTS FUEL PRICE INCREASES

Economists and businesspeople have pointed to various factors that continue to impact everyday costs.

Dionisio D’Aguilar, president of the Chamber of Commerce, said the main reason for rising costs in 2007 was the substantial increase in energy prices.

He noted that at the beginning of 2007, the price of a barrel of oil was $55. It is now averaging $91 a barrel.

"During the course of 2007 the price of propane that Super Wash purchases increased by 32 percent," said Mr. D’Aguilar, who owns the popular laundry chain.

"We have not increased our prices during 2007, so we’re going to have to increase our prices. That’s just propane; that’s not electricity."

He noted that energy is a substantial component of many businesses and rising energy costs have forced businesses to increase prices.

"There’s nothing you can do about it," Mr. D’Aguilar said, "unless you switch to an alternative energy source, which takes time, which is not readily available and clearly the government, I think, now has to clearly consider allowing businesses to use alternative energy sources, for example, solar."

He pointed to Barbados, where the government made a conscious decision to motivate people to switch to solar energy, and provided incentives to encourage this.

Mr. D’Aguilar said dealing with the problem would require some innovate thinking.

SHIPPING COSTS UP

Mr. D’Aguilar also said energy costs are "permeating through the system."

"Shipping costs have gone up. When you land [goods] at the dock the equipment that they use at the dock requires gasoline, so that’s gone up," he said. "Your whole freight has gone up. A lot of raw materials require energy to create them into finished goods, so the prices have gone up. It’s just all the way down the supply chain; everything has gone up because energy is an important component of that cost."

Recently, Seaboard Marine announced that bunker tariffs increased this month as a direct result of crude oil price increases.

When he spoke with the Bahama Journal recently, Kristof Lingier, manager of Seaboard Marine Bahamas, stressed that the price of oil has an impact on everything.

"The plastic cups we drink in, the fuel we put in our car and the containers that are shipped in will all be affected by the increase in crude oil unfortunately. We are not talking about burning gallons; we are talking about burning tons, so you can imagine that the magnitude is completely different when it comes to actually running a ship," he said.

Over the past few months, numerous courier operators and other business proprietors have voiced concerns about the soaring price of fuel in the country – and businesspeople say the trickledown effect is being felt by consumers.

TOURISM STAKEHOLDERS FEEL IMPACT

Even tourism stakeholders are feeling the burden of rising energy costs.

As an example, Sandals Resorts said in a recent statement that after careful consideration and effective immediately, it will eliminate its recent energy surcharge.

"No one disputes the very real challenge of meeting escalating energy costs," said Gordon "Butch" Stewart, chairman of Sandals Resorts, "but we respect and highly value the opinion of our travel partners who are on the consumer front lines. We always want to do what is in their best interest and therefore after much discussion with them, we feel that now is not the time to enact this new policy."

According to Mr. Stewart, Sandals Resorts will rely further on its award-winning and ongoing sustainable tourism efforts to reduce energy use across all of its resorts.

CONSTRUCTION COSTS CLIMB

Like many other areas of the economy, the construction industry is also witnessing rising costs.

On December 4, Edward P. Williams, president of National Products Company Limited, advised that his company had been put on notice by its supplier of an increase in the price of cement as of January 1.

As a result, he wrote to customers, cement costs will increase.

Stephen Wrinkle, president of Bahamian Contractors’ Association (BCA), told the Bahama Journal that building costs are expected to continue to rise in the new year.

"It’s going to effect all of the construction trades, of course," Mr. Wrinkle said of the rising cement costs.

"I’m not sure what the retail difference is going to be at this juncture, but you know virtually every home in The Bahamas uses some concrete and cement…so it is going to have a net effect on the cost of construction."

28 December 2007

December 28, 2007 | 10:08 PM Comments  0 comments

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