In Mon­day’s bud­get pre­sen­ta­tion, Min­is­ter of Fi­nance Dav­en­dranath Tan­coo stressed that the gov­ern­ment had tak­en the de­ci­sion not to re­vise the sub­sidy for su­per gaso­line one year af­ter re­duc­ing the cost of the fu­el at the pump by $1.

“We could have re­vis­it­ed the sub­sidy on su­per gaso­line. But in­stead, this car­ing ad­min­is­tra­tion chose to ab­sorb the in­creased cost rather than pass it on to our cit­i­zens and en­sured that trans­porta­tion costs did not fu­el in­fla­tion. This cost the Gov­ern­ment $290 mil­lion dur­ing the fis­cal year,” said Tan­coo.

He ex­plained that the move had saved cit­i­zens thou­sands of dol­lars at the Gov­ern­ment’s ex­pense.

“Had we not done so, Mr Speak­er, the av­er­age price of a litre for the pe­ri­od March to Sep­tem­ber 2026 would have been $7.64 per litre in­stead of the $5.97 per litre that cit­i­zens pay,” said Tan­coo, adding, “A dri­ver who filled up their 50-litre gas tank four times a month with su­per gaso­line dur­ing the past year saved $332 per month or $3,984 for the year.”

How­ev­er, while there was re­lief that the sub­sidy was not ad­just­ed, econ­o­mists and en­er­gy ex­perts were a bit be­mused by the move, es­pe­cial­ly when they as­sessed it in con­text with oth­er mea­sures in­tro­duced in the bud­get to earn rev­enue.

Name­ly the de­ci­sion to in­tro­duce an elec­tric­i­ty sur­charge on res­i­den­tial house­holds con­sum­ing over 3,000 kWh per billing cy­cle—a mea­sure that Tan­coo said af­fects ap­prox­i­mate­ly 10 per cent of res­i­den­tial con­sumers. Ad­di­tion­al­ly, while in­tro­duc­ing a 25 per cent re­duc­tion on ex­cise du­ties on al­co­hol, the Fi­nance Min­is­ter stat­ed there would be in­creased tax on lux­u­ry al­co­hols such as cham­pagne.

Dur­ing CNC3’s post-bud­get analy­sis show Re­al­i­ty Cheque on Mon­day night, Eu­gene Tiah, the CEO of the Caribbean En­er­gy Cham­ber, point­ed out that con­tra­dic­tion as he ar­gued the uni­ver­sal cush­ions pro­vid­ed by the sub­si­dies ul­ti­mate­ly un­der­mine the coun­try’s pro­duc­tiv­i­ty.

“It didn’t sur­prise me that he didn’t touch it (su­per gaso­lene). Whether it should have been touched is an­oth­er ques­tion,” said Tiah, “I think we are very, very chal­lenged with the amount of sub­si­dies that we have. I mean, I could speak about trans­port sub­si­dies, and I could speak about elec­tri­cal pow­er.

“My key is­sue with those is that, and I see that we have at­tempt­ed a sen­si­ble move on the elec­tric­i­ty, I think that we have to come up with a more tar­get­ed method of ap­ply­ing sub­si­dies.”

He point­ed out that more of­ten than not it ap­peared that mea­sures, which should help the low­er-in­come peo­ple were more like­ly ben­e­fit­ting the wealthy.

He said, “I think that this one-size-fits-all is not a good ap­proach. It irks me when I see a Porsche pull up and fill­ing up with sub­sidised diesel. That’s not the in­ten­tion. The in­ten­tion is to de­liv­er it to the sec­tors that could ben­e­fit the coun­try. And right now, the ap­proach to me does not work to achieve that end. I see a lot of in­ef­fi­cien­cy and waste in both trans­porta­tion fu­els and the elec­tric­i­ty fu­els. “

Econ­o­mists Dr Ronald Ramkissoon and Jamelia Har­ris agreed that there needs to be an ex­am­i­na­tion of the ap­pli­ca­tion of sub­si­dies, es­pe­cial­ly giv­en the chal­lenges the gov­ern­ment has faced in ad­dress­ing debt and in­creas­ing rev­enue.

“As much as we may not like it, if we want to get the pop­u­la­tion ac­cus­tomed to pay­ing the cost of the ser­vices, the goods and ser­vices that we con­sume, then we want to have a par­tic­u­lar price. I thought there might have been some in­crease in the gas prices. I don’t mind that it wasn’t in­creased,” said Ramkissoon, adding, “but in terms of look­ing at the broad­er econ­o­my, there are cer­tain things you un­der­stand that if it doesn’t hap­pen, then when things change, we live in a very un­cer­tain world.”

Dr Ramkissoon warned that buffer­ing the pub­lic from in­ter­na­tion­al eco­nom­ic re­al­i­ties cre­ates a false sense of sta­bil­i­ty which could open the coun­try to suf­fer far more se­vere eco­nom­ic shocks than those where mar­ket pric­ing op­er­ates trans­par­ent­ly.

Dr Har­ris said while she felt the elec­tric­i­ty sur­charge was a cre­ative and pos­i­tive ap­proach, the coun­try def­i­nite­ly need­ed to make an as­sess­ment of what should be achieved through sub­si­dies.

“I think we have to come back to the ob­jec­tive of what some of these sub­si­dies are and the type of eco­nom­ic sys­tem that we want,” Dr Har­ris said.

“What I think we need is a deep­er con­ver­sa­tion on the type of so­ci­ety that we want to see. If we want to see a so­ci­ety where we say those who earn a bit more have a bit more of a lux­u­ri­ous life and we think they should pay a bit more, and we want to help those who are in need a bit. That is a big con­ver­sa­tion.”

She con­tin­ued, “But what we’re do­ing is we are just kind of mak­ing small changes on the mar­gin, and we say, ‘Well, this is why we’re do­ing it, with­out any sort of re­al philo­soph­i­cal con­ver­sa­tion around it. So, spe­cif­ic to the elec­tric­i­ty, that’s jus­ti­fied by say­ing these peo­ple could af­ford to pay more, and they should pay more.

“And it’s the same thing with the al­co­hol. It’s like, oh yeah, this is lux­u­ri­ous. But is this what we’re say­ing that we stand for as a so­ci­ety? Those who could af­ford to pay more should pay more. And if that’s the case, then we have that con­ver­sa­tion. But I don’t think we should pick and choose when it is ap­pro­pri­ate to say that.”

Tiah agreed that the phi­los­o­phy need­ed to change in or­der for T&T to achieve ef­fi­cien­cy with re­gard to sub­si­dies, and that need­ed to be clar­i­fied.

“I think I like that idea, and I think I mean we, with re­gard to our fo­cus on en­er­gy and en­er­gy ef­fi­cien­cy and things like that, I think that we need to be very clear what we want to do,” said Tiah.

“If we want to dri­ve pro­duc­tiv­i­ty and ef­fi­cien­cy and things like that, we need to be clear. We can’t have a pric­ing mech­a­nism that makes every­one quite com­fort­able leav­ing ap­pli­ances on and al­low­ing pow­er to be con­sumed with­out any pro­duc­tive use com­ing from it. So, we have to be very clear. I thought we would have heard more, to be quite hon­est, about pro­duc­tiv­i­ty and ef­fi­cien­cy.”

How­ev­er, like Dr Ramkissoon, po­lit­i­cal sci­en­tist In­di­ra Ram­per­sad ac­knowl­edged that the de­ci­sion con­cern­ing the sub­si­dies was dri­ven by the need to re­main favourable in the eyes of the elec­torate, as she point­ed out there were lo­cal gov­ern­ment elec­tions sched­uled next year.

Dr Ramkissoon said this re­cur­ring trend had con­sis­tent­ly dis­rupt­ed prop­er eco­nom­ic man­age­ment in T&T.