The Government says T&T has lost $1.5 billion due to the racket involving the illegal sale of subsidised diesel fuel. This, according to Minister of Energy and Energy Affairs, Kevin Ramnarine. He was speaking to journalists at yesterday's BGTT energy luncheon at the Hilton Trinidad and Conference Centre. He said an investigation by the ministry showed 40 per cent of total diesel sale was made illegally to vessels that then take it up the islands, even to Guyana, and resell it at close to international prices. Ramnarine added: "We estimate that the country has lost over $1.5 billion from the illegal sale of diesel.
"In other words, we estimate that 40 per cent of all the diesel sold in Trinidad and Tobago is being done illegally." He said the ministry's investigation involved a study of the entire supply chain and it was clear such a high level of leakage was happening. "You know what this country could have done with that $1.5 billion?" Ramnarine asked. "We could have built hospitals, roads, schools with that type of money, so this illegal sale of diesel is hurting the economy," she said. Under the Petroleum Production Levy and Subsidy Act, it is illegal to sell fuel to non-T&T nationals and vessels unless the fuel is to be used in T&T. This is separate and apart from bunkering activities.
With the Government having to find $4.3 billion to keep fuel prices low, there has been increased concern about the amount of public funds paid out for illegal use of fuel. Recently, Central Bank Governor, Ewart Williams, joined the call for the Government to review the fuel subsidy, saying it cannot be avoided. Speaking at the Central Bank's release of its July Economic Bulletin, Williams said: "I cannot see how the Government can avoid addressing the fuel subsidy. Whether it is $2 billion or $4 billion, it is a lot of money." The governor's call for the review came as he pointed out that the Government could not afford to indefinitely run deficits and projected that growth would be anemic.
With that in mind, he said, there was need to address issues of Government expenditure of which the fuel subsidy was a significant part. Ramnarine said the recent discovery of an illegal diesel fuel depot at Sea Lots was "just the tip of the iceberg" and there were other similar operations in Trinidad and Tobago. He said: "The Ministry of Energy is not in the business of arresting people. We have given the information to the relevant authorities for their action and we are confident we will break the back of this illegal sale of diesel." In a recent interview, Lt Colonel Kirk Jean-Baptiste, public relations officer of the T&T Coast Guard, told the Business Guardian the Coast Guard in the past had made arrests and handed over the perpetrators to the Customs and Excise Division.
He said: "This problem has been happening for sometime now, where locals buy fuel, particularly diesel at subsidised prices, and then sell it to boats that take it to Guyana and up and down the islands. "They then resell that fuel at significant profits. We have held people and passed them to Customs." He added: "Everybody knows it is happening. Our information is that it is not just happening in the Gulf of Paria but also in the southern peninsula and on the southeast coast." Ramnarine said he had spoken with former ministers of energy to get a sense as to when the problem first reared its head and he was told it started about ten years ago and had significantly increased over the last five years. Trinidad and Tobago's fuel subsidy for diesel for the fiscal year 2010/2011 is estimated in excess of $3.5 billion.