Neither Government sources—or the Opposition—anticipate Finance Minister Colm Imbert will increase the fuel price in Monday's mid-year review.
But only Imbert's 45-minute (plus 15 extra minutes) review statement will say for sure.
In his 2019 Budget he had said that if oil prices remained above (US)$70 in this fiscal year the fuel subsidy would exceed $1.5b in 2019 if there's no "adjustment to the retail prices at the pump".
At Budget presentation last October oil prices were (US)$73.43 and at that price, Imbert said the fuel subsidy in 2019 was estimated to cost the Treasury $1.5b "...Money we simply don't have."
He had pegged the Budget on a (US)$65 oil price, but following price drop in January, he had adjusted it to (US)$55 and telegraphed Budget programme revision.
Yesterday's oil price was (US)$61.66 (WTI crude) per barrel and (US)$70.62 (Brent crude)—under the 2018 (US)$73 price he was concerned about.
Imbert's pronouncements on the performance on the $51b Budget over the last six months will be delivered in Parliament from 1.30 pm. He can get extra time beyond the allotted 60 minutes' speaking time if necessary. Opposition Leader Kamla Persad-Bissessar will have equal reply time.
Last Friday, government officials said they would be surprised if fuel is raised, considering the election climate, economic issues the public has been coping with and because of Imbert's recent "turnaround" declarations.
UNC whip David Lee added, "He'll hardly have room to hike fuel prices because of upcoming elections. If he does, it'll be interesting to see what he does to balance it. His revenues are down and despite his boasts IMF and World Bank are revising their assessment on T&T, we've never heard of them getting figures wrong.
"We'll have to see if he'll use National Investment Fund bonds or borrows from the Heritage and Stabilisation Fund. The Budget's six 'Game Changers' are no longer intact and Government's borrowed $700m from the Infrastructure Development Fund to pay Petrotrin retrenchment benefits. So we are awaiting explanation on his 'turnaround'."
Local Government Minister Kazim Hosein believes Imbert's management did well considering what the PNM faced on assuming office. "I'll have to say, yes. We just have to wait to see what he presents."
Hosein believes Government's Local Government reform—which he said people are pressing for—will be a 'game changer'. "It's a promise and the reform will come."
Government's 2019 Budget banked on six 'game changers'—as part of what the Budget described as strategic "confidence inducing developments" which would make Government's transformation "an assured reality".
Here's how they were described in the Budget and where checks reveal they are now:
• T&T/VENEZUELA DRAGON GAS PROJECT—The Budget stated it would start with 150.0 million standard cubic feet of gas which would "return our petrochemical sector to full production, making the sector a much more attractive source of investment".
Government has acknowledged it's delayed following Venezuelan unrest. Apart from the term sheet agreement, no legally binding document was signed. Legal advice was being sought on whether US sanctions against Venezuela may affect it.
• SANDALS RESORT—described as "catalytic tourism event...representing radical stimulus for Tobago tourism providing platform for sustainable economic/social development". After January announcement it was out, Government signalled there may be alternatives. Tourism officials said Friday, renovations are about to start on Turtle Beach by Canada's Sunwing group which proposed upgrade. That group also expressed interest in the Magdalena Grand, but current negotiations for an operator were already in train and that's being seen through to completion, expected next month.
• TWO AUSTRALIAN FERRIES—to revitalise the sea bridge due mid-2020. Yesterday the Government confirmed work commenced on the two Cape Class vessels with the cutting of the steel weeks ago and the Australia Government had a ceremony regarding this.
• BUOYANCY OF CAPITAL MARKETS—Following the success of the $4B National Investment Fund bond, Government is moving to a $1b Housing bond soon.
• LA BREA DRY DOCK & SHIPBUILDING/REPAIR FACILITY—to generate almost 16,000 indirect and direct jobs and projected to "energise formerly oil-based south/west communities". Launched last year, under construction.
• REFORMED PETROTRIN—with successor entities concentrating on exploration/production and boosting current production level of 40,000 barrels per day, "the Forex earning of which would benefit citizens…we're taking steps to ensure workers are appropriately compensated…"
OWTU's second vice president Carlton Gibson, said Friday former workers still have open-ended issues including at Inland Revenue. BIR 's processing claims and OWTU's awaiting final word on when workers will receive monies. Matters regarding the two-year medical plan are in the Industrial Court as are other outstanding issues, including those prior to Petrotrin's closure. While OWTU awaits word on its bid for the refinery, Gibson said some workers have found jobs at Heritage and Paria Fuel Trading, some migrated to Canada and the US, "...But many are still unemployed."
July conclusion for refinery RFPs
With the successor entities to Petrotrin among the six budgetary game changers, transition team chairman LISA ALI replied to questions on the status of current issues concerning the situation. Ali leads Trinidad Petroleum Holdings Limited’s (TPHL) transformation team and is the interim Terminal and Trading General Manager for Paria Fuel Trading Company Limited, one of the three successors Petrotrin subsidiaries.
She holds a Degree in Chemistry and Analytical Chemistry (Hons) and a Masters in Business Administration from the University of the West Indies. She has a technical background; having worked for 16 years in manufacturing and petrochemical industries in senior Technical and executive roles working at locally-based methanol plants. In 2006, she transitioned into Human Resources (HR) working as HR Vice President for BP’s Trinidad business where she implemented a nationalisation workforce strategy and progressed BP Trinidad’s diversity and inclusion agenda.
Ali subsequently moved into the oil and gas industry spending over 14 years, holding positions both locally and internationally. She’s undertaken assignments in Brazil as the HR Vice President; the UK and the Middle East
—and has a wide range of experience, having managed a number of large-scale global business transformations. Her position prior to returning to T&T was Human Resources Vice President for BP (Upstream, Talent and Learning).
Q: After Finance Minister Colm Imbert projected the refinery would be leased to an “...acceptable operator by year-end”, what’s the current status of Requests for Proposals for it?
A: We’re currently in the non-binding first round phase of the transaction. This phase involved open invitation to potential buyers followed by the signing of non-disclosure agreements by interested parties, who were then allowed access to our data room to review technical and financial information to prepare their non-binding proposals.
Q: From which countries have expressions of interest come?
A: We have global interest and participation in the process including local parties. We’re at a confidential stage and unable to share further details currently.
Q: How many, if any, of interested parties have expressed interest in some arrangement with Paria? Is a separate RFP out for Paria?
A: Paria comprises assets that were part of the integrated oil company. Anyone operating the refinery would need access to the terminal assets to bring crude into T&T and export finished product as part of their business. Paria’s assets have therefore been included in the RFP to allow for the widest range of proposals, thereby ensuring T&T gets best possible value for its assets. There is one RFP.
Q: How far has the process progressed?
A: We’re currently in the non-binding first round stage; 25 of the 70 parties have signed confidentiality agreements.
Q: When is a decision likely on the refinery; will it take longer if the incorporation of Paria is factored in?
A: We’re working with a timeline of end of July to have a decision on a preferred party. However, it’s difficult to say in the absence of concrete proposals. We want to ensure an efficient process, acquiring competitive bids and deriving the best value for the country’s assets.
Q: Is it likely the refinery could be up before the first year of Petrotrin’s closure?
A: We’re working very hard to get the best value for T&T.
Q: How much of the $1.4m worth of drugs at Petrotrin’s Augustus Long hospital up to last December, remains intact and how much expired?
A: The drugs were donated to South West Regional Health Authority who’s already taken possession.
Q: What’s occurring with the rest of Petrotrin’s assets?
A: Non-core assets have been secured. There have been instances of pilferage and malicious vandalism. We’re doing everything practical to minimise this. With police and military support we’re ensuring persons engaging in these acts are dealt with according to T&T’s laws. Government is the ultimate owner of assets and will make a final determination on what’s to be done with them.