Kevin Ramnarine, who served as Energy Minister in the People's Partnership administration of Kamla Persad-Bissessar, yesterday painted a grim scenario of small gas stations facing closure and increased unemployment within 12 to 18 months if the margins available to service station operators are not increased.
"What the gas station owners are telling us is that the straw is about to break the back of the camel, in addition to which other things have gone up, other inputs they would need for their business," he said yesterday when he addressed a conference on T&T's Fuel Subsidy: The New Reality at the Arthur Lok Jack Graduate School of Business, Mt Hope.
Ramnarine said gas stations, with the exception of Quik Shops, have not had a revision of their margins in more than ten years and within that period, things have become more expensive. He said large gas stations earn about 50 per cent of their revenue from Quik Shops, while the balance comes from revenue earned from fuel sales.
"In the small gas stations, almost 90 or 95 per cent of the revenue comes from the pump. They are tottering on the brink of going out of business," he said.
The former minister said service station operators had made representations to the Minister of Finance but nothing had been done about their plight.
"You are going to have dislocation. Stations have closed down in the Princes Town and Moruga area," Ramnarine said
He said another challenge for the sector was the delay in construction of new gas stations because the owners were awaiting regulatory approval. He said he was hopeful the issue would be raised when the budget debate goes to the Senate next week.
He also called for amendment of the Petroleum Levy and Subsidy Act. If the objective is to remove the fuel subsidy, which is the IMF's recommendation, he said, "one must treat with the law–the underlying issue is the outdated law is still there."
On another issue, Ramnarine said while Government was well within its right to review the Gas Master Plan, they had been doing so for 14 months and "the industry is getting very uneasy."
He said: "The industry would like that review to come to an end and for Government to tell the industry what the plan is."
Ramnarine said the energy industry needs direction on gas prices and natural gas allocations, as well as the fiscal regime. In addition, he revealed, a major incentive for investment in the sector expires in December.
"You can't be asking people to invest and they don't know where the goal post is," he said.
Ramnarine said the sooner there was certainty about an energy policy the better.
"We are headed for uncertain and turbulent times," he said, adding that he did not expect oil prices to rebound as expected by some experts.
On the matter of doing business with Venezuela he said that was a good long-term plan for the sector but there must be the political will on both sides.
He said while doing business with Venezuela was top priority for T&T, it was not necessarily top priority for Venezuela and that difference in prioritization required a lot of work.