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Wednesday, July 2, 2025

No more fuel subsidies

by

SHARLENE RAMPERSAD
1731 days ago
20201005

SHAR­LENE RAM­PER­SAD

 

The Gov­ern­ment will re­move fu­el sub­si­dies on pre­mi­um and su­per gaso­line come Jan­u­ary 2021, mak­ing way for gas sta­tion own­ers to set their own prices for fu­el.

This, from Fi­nance Min­is­ter Colm Im­bert dur­ing his pre­sen­ta­tion of the 2020/2021 bud­get in Par­lia­ment on Mon­day.

Im­bert said over the last 14 years, the State has spent $25 Bil­lion in fu­el sub­si­dies.

“We have an­a­lyzed the sub­sidy im­pact on the na­tion­al com­mu­ni­ty and we have formed the judg­ment that not on­ly does the sub­sidy dis­pro­por­tion­ate­ly ben­e­fit the high­er in­come groups, but their us­age was in­ef­fi­cient from a na­tion­al econ­o­my per­spec­tive,” he said.

He said at the cur­rent in­ter­na­tion­al oil prices, sub­si­dies do not arise in the sale of pre­mi­um and su­per gaso­line. He said sub­si­dies con­tin­ue to pre­vail in the sale of diesel, kerosene and LPG.

Im­bert said with these con­di­tions, the Gov­ern­ment will re­move the fixed re­tail mar­gins for fu­el sales, leav­ing price set­ting up to pe­tro­le­um deal­ers.

“We are of the view that in the con­text of the pro­ject­ed in­ter­na­tion­al oil prices, the fu­el mar­ket should now be lib­er­al­ized. Un­der this arrange­ment—which is tar­get­ed for in­tro­duc­tion in 2021—the fixed re­tail mar­gins for all liq­uid pe­tro­le­um prod­ucts will be re­moved. Pe­tro­le­um deal­ers and re­tail­ers will now be al­lowed to fix their own mar­gins,” he stat­ed.

He said with in­ter­na­tion­al oil prices, the net re­sult should see lit­tle to no in­crease in the cost of fu­el prices at the pump.

But he not­ed that if oil prices re­cov­er in­ter­na­tion­al­ly, the price of fu­els will like­wise in­crease.

“This new dereg­u­lat­ed mar­ket will bring to an end 46 years of fu­el sub­si­dies and the high so­cial ex­pen­di­ture of $25 bil­lion in the last 14 years,” Im­bert said.

The Fi­nance Min­is­ter said all the gas sta­tions owned by the Na­tion­al Pe­tro­le­um Com­pa­ny will be of­fered for sale to the pri­vate sec­tor.

He said pref­er­ence would be giv­en to ex­ist­ing deal­ers and con­ces­sion­aires.

FuelEconomyBudget


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