Energy Minister Franklin Khan says that rural service stations serve an important economic function and they are a necessity.
He said, “If you have a fixed margin business, the only way you can make money is to increase volume and keep your operating cost in check. But if you are running Peake’s Gas Station in the West, you can increase volume because thousands of cars pass every day. But if you are running a gas station in Tabaquite in Toco, there is no potential to increase your volume so some due consideration has to be given to rural service stations because rural people are people too. You cannot keep shutting down gas stations in rural areas and say that it is not economic.”
He said it was unfortunate that the liquid petroleum fuel service station retail network in Mayaro had been “underserved” since the establishment of National Petroleum (NP) in 1972 when the assets of BP were acquired.
Khan made the comments at the sod-turning event for the construction of the newest NPMC Mayaro Service station on Wednesday.
According to NP, this site had been earmarked for the development of a New To Industry (NTI) Service Station which would provide customers with a superior and modern fuelling experience, in an effort to improve the quality of service offered in Mayaro.
The minister referred to the recent complaints of the Petroleum Dealers Association (PDA) about insufficient profit margins.
“In recent weeks a major wholesaler of petroleum refined products, Unipet along with various members of the PDA have been advocating for increases in the wholesale and retail margin for wholesalers and retailers of liquid fuel. Unipet shut down for a day and put the whole country in a state of chaos. I made an intervention and we got the system. The PDA rightfully or wrongfully has been clamouring for increasing the margin. Unipet considered that it was critical in the context of a regulated pricing fuel regime to ensure that the industry should always be on a self-sustaining and profit-oriented basis. It must be noted the liquid petroleum products market has long been the subject of public economic policy.”
He added that the Government sympathised with the wholesalers and retailers and there was a case to increase the margins but urged the PDA to be patient as the government was doing technical studies.
“We recognise the need to perform an in-depth analysis of suitable increases to these profit margins to ensure sustainability and operational efficiency. As I speak, this is being done by the Ministry of Finance and Energy. I do not know how much it will be if it will be anything at all,” Khan said.