Raphael John-Lall

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.