Raphael John-Lall
raphael.lall@guardian.co.tt
Motorists will have to pay more for gas at the pump and the cost of living will continue to escalate if the Government acts on its plan to cap the fuel subsidy at $1 billion.
This is the view of different stakeholders from workers to taxi drivers to an economist who spoke to the Sunday Guardian recently.
Finance Minister Colm Imbert–speaking during his presentation at the Spotlight on the Economy at the Hyatt Regency Hotel, Port-of-Spain, earlier this month–estimated that the fuel subsidy will cost the Government $2.6 billion for 2022 at current energy prices. Imbert said that for the fiscal year 2023, it could cost $2.1 billion based on US$97.50 a barrel of oil, and he revealed the Government's intention to cap the fuel subsidy at $1 billion.
Eyes are now trained on Imbert as he gets set to read the 2022-2023 budget tomorrow.
Imbert noted that T&T has one of the region’s lowest gas prices. According to data from globalpetrolprices.com, the price of gasoline in oil-producing T&T averages US$0.99 per litre.
Barbados, for example, has one of the region’s and world’s highest gas prices. According to the data, Barbadians are paying an average of US$2.34 for gasoline, which is higher than places such as the UK, Switzerland, Singapore, Ireland and Sweden.
Among other Caribbean countries, Jamaica has the second highest cost per litre for gas–US$1.74, followed by the Bahamas at US$1.71, the Cayman Islands at US$1.66 and St Lucia at US$1.46 per litre.
Dr Regan Deonanan, senior economist at the University of the West Indies.
PHOTO DR REGAN DEONANAN
In Suriname, the gas price is US$1.10 per litre and in Guyana, it is US$1.30.
Economist
University of the West Indies (UWI) economist Dr Regan Deonanan told the Sunday Guardian that higher gas prices will lead to a higher cost of living for T&T’s citizens.
"The direct and more immediate impact of a cut in the fuel subsidy is an increase in the cost of living in T&T for households. Without needing to be said, the price of transportation for individuals will go up. But transportation costs also affect the price of other goods and services within the economy, and these are also likely to increase. Many of the affected goods and services are required by households. In the case of the business community, their operating costs are likely to increase."
Deonanan said fuel prices, in all categories, have increased several times over the last decade. The larger increases occurred for unleaded super gasoline and auto diesel. For instance, unleaded super gasoline was $3.11 per litre (vat inclusive) in 2015. By 2022, this price increased to $5.97. In the case of auto diesel, the price increased from $1.72 in 2015 to $3.91 by 2022. Unleaded premium gasoline increased from $5.75 in 2012 to $6.75 in 2022.
Citizens speak out
There is anxiety among citizens from all walks of life as they complain about increasing gas prices and the negative impact on their lives.
Taxi driver
Aaron Guerra, a taxi driver who works on the Cocorite to La Horquetta route in Arima, predicted that taxi fares on his route as well as in other parts of the country will go up again if gas prices are raised another time.
He said taxi fares on the route he operates from increased five years ago, and after gas prices raised in April, there was a fare increase from $5 one way to $6 one way.
"10 years ago to fill my tank used to cost me $130 to $140, now to fill my tank is close to $300 a day. So if I make $400 to $500 daily, I have to spend up to $300 to fill my tank. That’s half of my day’s earnings. Passengers were very angry when there was the last increase in May. But we had no other choice as gas prices went up."
Based on the Government's pronouncements about cutting the fuel subsidy, he said there was the possibility their route as well as taxi drivers from other parts of the country will raise their fares.
"I work from 6 am to 6 pm, so with the last gas price increase, I have to make more trips daily to earn more money to fill my tank. You understand why more fare increases are on the horizon."
He also said car owners and taxi drivers spend a lot of money on car maintenance and gas prices add to that cost.
"Tyres, suspension, the engine, all this cost a lot of money to maintain as a taxi driver. A taxi driver has to put aside $1,500 to $2,000 monthly just for maintenance. So you could see that when they raise gas price increases on this why taxi drivers will raise fares again."
Single mother
Lyncia–who is a mother of five ranging from ages 21, 18, 15, 8 and one-year-and-a-half–does not know how she will survive if gas prices and accompanying taxi fares go up.
She lives in La Romaine, works in a supermarket in San Fernando and earns between $400 to $600 weekly.
"It is really tough. The first three children, their father died and I don’t get any help from the father of the next two. I do get social assistance of $1,500 monthly and it helps with some things. My 15-year-old son goes to Servol and he travels there every day so if gas prices go up and taxi fares go up again, I don’t know how he’ll go to school. I have to travel to work daily too. Recently in the La Romaine area, the taxi fare went up from $6 to $8," she told the Sunday Guardian.
She added that food prices are also going up in addition to other basics needed to live and she hopes the Government thinks about the poor before they raise the price of gas or big business owners raise the price of other commodities.
"Things are getting harder every day for people who have no money. All I could do is pray that gas prices don’t rise again. I don’t know how my children and I will survive."
Public servant
One public servant who only gave his name as Kevin said that with wages being kept low, gas price increases will only negatively impact ordinary workers like him and his family.
"People buy vehicles because they cannot afford to buy a house as the prices are out of the reach of normal people. So they buy a car to show ambition. Also, people don’t have to rely on an unreliable public transport system.
"It’s costly to maintain a car because of the terrible roads in T&T as you have to change a tyre, rim and suspension. I spend $1,500 on super gas on my car every month driving from South to North. With gas prices going up and could increase in the near future, I may have to use public transportation or walk."
Father of two
A father of two children who gave his name only as George told the Sunday Guardian that at the moment he does not have a car and his two children use public transportation to travel to school.
‘"I live on O’Meara Road in Arima and my children have to travel to school every day. A few months ago they raised the taxi fare by $1 from here to the centre of Arima. Every day, you’re seeing food prices going up, and now the Government’s talking about another increase in gas prices. All of this is hurting my pocket."
Businessman
Clint Arjoon, who is based in South Oropouche and owns several businesses in the block manufacturing and rental sectors, said that increases in fuel prices will only have a negative increase on his business as well as others.
"I don’t see any positive impact that these increases have. The Government argues that reducing the fuel subsidy will give them more money to spend on social services, but I don’t see it that way. Look at the roads, for example, they are still deteriorating."
He gave examples of how higher fuel prices will impact not only business owners but also workers.
"So they are collecting these extra taxes and the citizens and business community are not seeing the results. I have seen increased repair to my vehicles. I have to increase prices in terms of transportation and commodities because of the fact that we have to cater for the amount of damage, cater for the extra expenditure in fuel prices. We also have to cater for the workers who are travelling. We have to give them wage increases to compensate for the higher taxi fares. So a business person has to charge more for goods and services."
He added that what he manufactures is not a necessity like food in a supermarket, if people cut back on disposable income, the decorative concrete blocks he sells would be the first casualty.
"I also have a portable toilet business where transportation is important. Normally where it would cost $800 to $900 for transportation to go to Galeota on the Mayaro side, my price has gone up to $1,500 now. Because that roadway is the worst it has in T&T. It means I have to pay more labour and I will get less done for the day. I also have a pool cleaning business, in my services where I have to be running to get cleaning supplies. It will have an increase in cost because of the higher gas prices."
Regardless of how the analysis is done, he said, no one is benefiting from the increase in gas prices.
"To me, this reflects the Government’s inefficient management of state resources."
Increases over the years
Quoting from the Price of Petroleum Products document, Deonanan gave the price increases of super gasoline, premium gasoline and diesel over the past ten years.
In April 2022, the prices of premium gasoline and super gasoline were adjusted by $1 per litre to $6.75 and $5.97 per litre respectively, while the price of diesel went up by 50 cents per litre to $3.91 per litre.
In 2018, unleaded super gasoline increased to $4.97 per litre.
In 2017, diesel increased to $3.41 while super gasoline increased to $3.97 per litre.
In 2016, diesel increased to $1.98 $2.30, while super gasoline increased to $3.58 per litre.
In 2015, diesel increased to $1.72 while super gasoline increased to $3.11 per litre.
In 2012, unleaded premium gasoline increased to $5.75 per litre.