Unipet

Photo: JERMAINE CRUICKSHANK

Trinidad and Tobago consumes one billion litres of fuel a year.

That’s for just over one million cars on the road.

For a population of 1.3 million.

Last week, Paria Fuel Trading Company stopped supplies of fuel to Unipet over payments owed to it.

Finance Minister Colm Imbert said Unipet owed Paria $100 million and assured that the State’s fuel retailer National Petroleum (NP) would have supplies.

In turn, Unipet has initiated legal action against Paria in the High Court.

With Unipet’s fuel supply having run out and its 24 stations closed, and longer lines for fuel at NP service stations, former energy minister Kevin Ramnarine says there are several issues that should concern the population as it relates to fuel supply.

“The first is the viability of the fuel supply chain which sees over one billion litres of mainly super gasoline and diesel distributed to the population via 140 service stations. In addition to that network, peddlers supply diesel to large customers in construction, manufacturing, quarry sector.

“In fiscal 2019, the country consumed 599.3 million litres of super gasoline and 430.4 million litres of diesel. The consumption of premium gasoline is relatively small due to the price at the pump. We also have the supply of fuel to ships as bunkers while NP supplies jet fuel to airlines at Piarco. All this fuel (approximately 25,000 barrels/day) is now being imported by Paria Fuel Trading, the successor to what was Petrotrin’s marketing division. This supply chain is critical to the well-being of T&T,” he explained.

Ramnarine noted that the price of fuel at the pump is regulated and the wholesale and retail margins are fixed by law.

“This has been the case since 1974 when the Petroleum Production Levy and Subsidy Act was introduced. Service stations therefore operate in an environment where they cannot determine the price of the product they sell, and their profit margins are fixed. However, in recent years, their costs have been escalating. This includes the tripling of the Green Fund and business levies in 2016. Given that these levies are calculated on total income, their increase couples with the numerous increases in the price of fuel at the pump meant a significant increase in these levies for service stations. These changes have eroded the profits of the service stations and rendered many stations uneconomic,” he said.

He noted that the fuel subsidy has fallen by 93.2 per cent since 2014 which has reduced the fiscal burden on the Government.

“This reduction is a result of a combination of factors. The first and most important is the dismantling of the illegal export of subsidised diesel, the second is the increase in the price of fuel at the pump and the third is falling international oil prices. Given all this, one solution would be for the Government to give a nominal increase in wholesale and retail margins which would give breathing room for NPMC, Unipet, peddlers and the 140 service stations to service. Failing this, I fear we will see the collapse of the fuel supply chain,” he said.

BOX

Subsidy paid on

fuel by Government

2010- $2681 million

2011- $4232 million

2012- $4457 million

2013 - $4436 million

2014 - $4130 million

2015 - $2122 million

2016- $400,832,974.49

2017- $528,565,094.84

2018- $ 739,111,280.71

2019- $ 276,749,874.49

Source: Ministry of Energy

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