T&T faces the possibility of losing Caricom markets for the export of fuel as the price of fuel coming out of T&T is likely to increase.
Minister of Energy Franklin Khan told the Senate yesterday that Caricom countries now have the option of sourcing their products on the open market. He said Petrotrin still has the ability to supply small cargoes, including aviation fuel, to small Caricom countries, which gives it a strategic advantage. However, with a change in the business model, with Petrotrin having to import products from outside of the Caricom region, there is a possibility of increases in prices.
"The Caricom market is unique in that it calls for small package sizes, so not all international traders can facilitate that market. That was the strategic advantage of Petrotrin. However, there are other players in the market.
"We have gone into a free market situation. We are importing fuel for redistribution to Caricom (and) they have the option to continue with Paria or Petrotrin as the case may be, and there is no CET (Common External Tariff) now on fuel, so they can go to the international market and source their fuel at the most competitive prices in their opinion," Khan said.
The CET does not apply anymore as T&T is no longer in the refinery business.
Barbados has already announced that it has found a new supplier for petroleum products. It has also been receiving spot shipments of gas from the United States.
The minister said no one company will be given exclusive rights to supply products to T&T.
However, he noted that international traders, refiners, and marketers will be invited to participate in the supply of refined products, with the company with the most competitive being awarded supply contracts. Those products will include jet fuel, gas, oil and unleaded gasoline.
Khan said earlier this year, BP's Latin America Integrated Sales and Trading Group, won the contract to supply refined products following a competitive bidding process. He said the company's offer was superior on price and commercial terms on the composite cargos
The minister said that on October 27 Petrotrin received its first shipment of refined fuel, one of 16 cargoes that will be delivered in the next four months under the agreement.
He said the schedule of imported products has been designed to assure that a 20-day supply of all product grades is assured in the local market.
Khan added that supplies from January 1, 2019, will be sourced under the new entity, Paria Trading Company Limited.