SHAR­LENE RAM­PER­SAD

shar­lene.ram­per­sad

@guardian.co.tt

The de­ci­sion to sell the Na­tion­al Pe­tro­le­um Com­pa­ny’s 81 Com­pa­ny-Owned Deal­er Op­er­at­ed (CO­DO) gas sta­tions comes af­ter years of the com­pa­ny haem­or­rhag­ing from the cost of up keep­ing those gas sta­tions.

This ac­cord­ing to NP chief ex­ec­u­tive of­fi­cer, John Gor­mandy.

He was speak­ing on CNC3’s the Morn­ing Brew on Thurs­day. Gor­mandy said the com­pa­ny pro­vides month­ly, quar­ter­ly and year­ly fi­nan­cial state­ments to the Gov­ern­ment, which would have pred­i­cat­ed this de­ci­sion.

“They would have seen that the com­pa­ny would have ex­pe­ri­enced some de­cline in sales es­pe­cial­ly on the re­tail side where we start­ed to haem­or­rhage, it’s a re­al­ly heavy cap­i­tal in­vest­ment area and based on the down­ward trend of the fu­el sales, con­sumers are now opt­ing to move to more fu­el ef­fi­cient forms of trans­porta­tion main­ly the hy­brid and the CNG and we’ve seen a down­ward trend in the fu­el sales,” Gor­mandy said.

He said the cost to main­tain the 81 CO­DO gas sta­tions was be­tween $25 to $35 mil­lion a year and the switch to more fu­el ef­fi­cient ve­hi­cles led to a three to four per cent de­cline in NP’s rev­enue.

Gor­mandy said there was noth­ing the com­pa­ny’s man­age­ment could have done to pre­vent its fi­nan­cial hard­ship in a reg­u­lat­ed pric­ing fu­el mar­ket.

“We have been op­er­at­ing in a con­trolled en­vi­ron­ment, the pric­ing sys­tem is reg­u­lat­ed, the room for growth is lim­it­ed, we have x amount of ve­hi­cles on the road, there are two whole­salers com­pet­ing and NP al­so has a so­cial re­spon­si­bil­i­ty, our man­date is slight­ly dif­fer­ent from our com­peti­tor, we have to ser­vice ar­eas that our com­peti­tor doesn’t, more rur­al ar­eas and even To­ba­go.”

He said the ser­vice to To­ba­go was not prof­itable, giv­en the high trans­porta­tion cost to get fu­el to the is­land.

But Gor­mandy al­so laid blame on NP’s em­ploy­ees for the com­pa­ny’s fi­nan­cial woes.

He said the Oil­field Work­ers Trade Union (OW­TU) pushed for salary in­creas­es for the work­ers de­spite be­ing pre­sent­ed with fi­nan­cial records show­ing the com­pa­ny was strug­gling.

“Last year we would have had the set­tling of the 2011 to 2013 pe­ri­od where in the court, the case went to hav­ing to pay an ex­tra sev­en per cent in wages and we had to con­sol­i­date CO­LA which re­sult­ed in an­oth­er 25 to 30 per cent so on av­er­age, our wages would have gone up be­tween 25 to 30 per cent and that too con­tributed to the un­sus­tain­able po­si­tion we had so the re­tail side be­gan to see the com­pa­ny op­er­at­ing in the red,” Gor­mandy said.

Gor­mandy said he had hoped that when the OW­TU was pre­sent­ed with the fi­nan­cials “some sort of log­ic” would be ap­plied but that was not the case.

He said cred­it had to be giv­en to NP’s man­age­ment, who recog­nised the need to make a change be­fore the COVID-19 pan­dem­ic and start­ed a re­struc­tur­ing ex­er­cise in April.

Gor­mandy said the com­pa­ny’s three oth­er rev­enue streams- lu­bri­cants, LPG, ma­rine and avi­a­tion fu­el sup­ply were prof­itable and he hopes once the re­tail sec­tor is no longer a bur­den, NP will re­cov­er.

How­ev­er, he could not say when the gas sta­tions will be sold.

“We still haven’t got­ten the fin­er de­tails from the Min­istry, we were told the dereg­u­la­tion will take place in Jan­u­ary 2021, I ex­pect be­tween now and then we will get clear­er di­rec­tives on how the sale of the as­sets will take place I am es­ti­mat­ing this process will take prob­a­bly close to two years to com­plete,” Gor­mandy said.

He said the com­pa­ny hopes the jobs of em­ploy­ees will not be im­pact­ed but he did not rule out job loss­es.

“We still have to ser­vice these gas sta­tions, we are look­ing to en­ter in­to sup­ply con­tracts with them, the de­tails of that has to be hashed out when we get clar­i­ty on how the sale will op­er­ate- so it may not nec­es­sar­i­ly mean that we have to dis­place work­ers but if that has to hap­pen, we are al­ready start­ing to think along the line of of­fer­ing ser­vices to these deal­ers, in the form of main­te­nance, IT, cus­tomer ser­vice, there are ar­eas that may now open up for us to earn rev­enue.”

He said to give a de­fin­i­tive an­swer now would on­ly be spec­u­la­tion.