Finance Minister Colm Imbert says the Government will not reverse its decision to increase the price of Super gasoline by one dollar saying if that is done it will impact negatively on other sectors and it’s a choice that the Government just cannot make.
Speaking during an exclusive one-on-one interview the CNC3 Morning Brew host Hema Ramkissoon yesterday Imbert said, “every dollar we spend on fuel subsidy has to be taken away from our social service network, so if we were to reverse our decision then the $700 million that we don’t have to spend on subsidising Super will have to come out of healthcare and education, that is not a choice a government can make.”
Imbert said when the $1.5 bn subsidy was calculated, oil was US$70 a barrel, since then, he said, oil had reached US$76, “the subsidy is now $1.6 bn and climbing.”
If the decision to increase the price of Super gasoline from $3.97 to $4.97 is reversed, he said ,“then we have a huge $1.5 bn hole in the budget, then we will have to pull back on increases in the cap on pensions, the increase in disability benefits, the increase in public assistance.”
He said there are plans to “acquire more buses and improve public transportation,” in an effort to cushion the impact on the travelling public.
Petroleum dealers have complained that the increase in Super gasoline has virtually had the effect of wiping out the margin which they get at the pump, Imbert accused them of being “alarmist,” instead of going to the Government to talk, he said, “they hold a news conference, they make dire predictions, they make all sorts of announcements. I would much rather they come and speak to the Minister of Finance, tell us what the issues are and we will see if we can resolve them.”
While Imbert said there will be no reversal in the decision to increase the price of Super gasoline, he announced a shift in the policy announced in the budget that 30 per cent of Government vehicles be converted to Compressed Natural Gas (CNG), this will now be extended to include hybrid and electric-powered vehicles.
Imbert admitted to pre-empting an announcement he will make when he winds up the budget debate that the Government is extending the requirement of the 30 per cent of Government vehicles being CNG powered “to 30 per cent being CNG powered or electric-powered or hybrid-powered.”
"We are adding electric and hybrid, we not just focusing on CNG,” he said.
Imbert’s announcement followed criticism from the Used Car Dealers association’s president Visham Babwah that the Government was creating a monopoly situation for CNG.
Yesterday Babwah told Guardian Media he looked forward to the Minister “putting his money where his mouth is.”
"I hope that they adopt the policy and they really purchase some of those vehicles for their fleet and they don’t just say they are doing it,” Babwah said.
In making the announcement, Imbert admitted that “CNG has not been as successful as any government wanted it to be.” Part of the problem, according to Imbert, is that there are not as many CNG filling stations as there should be. There are also concerns about the cost of conversion.
But, he said, it is a “clean fuel, it is an economical fuel and the fuel consumption from CNG is fantastic,” as he referenced an advertisement with a maxi taxi driver who spent $4,000 a month on diesel for his vehicle but who after converting to CNG said his monthly fuel bill had been reduced to $800.
Imbert said if the fast ferries were running on CNG “the fuel cost would be a fraction of what it should be.”
The Minister was also asked whether new players were coming into the fuel market, Imbert said, “I will not talk about that at this point in time.”
He said there are currently two petroleum marketing entities, NP and UNIPET, which purchase fuel from Petrotrin.
When Petrotrin begins to import fuel, he said, the company will continue to supply to both entities.
“In the future, if there is need to change the business model and allow people to import fuel directly, UNIPET for example, that is something to be discussed, it is not something we will do willy-nilly.”
Currently, Petrotrin also produces bitumen, Imbert said when the company closes, “Petrotrin or another state entity will import bitumen, store and distribute it as it does now, so rather than manufacture it will be imported, stored and distributed.”
But he said a decision had been taken in the future that “we will open up the bitumen market and allow the private sector to import bitumen, store it and distribute it as they see fit.” But he said it is too early yet to talk about that with regard to fuel.