Thou­sands of jobs may be lost if the Na­tion­al Gas Com­pa­ny (NGC) goes ahead with its plan to sig­nif­i­cant­ly in­crease nat­ur­al gas prices to man­u­fac­tur­ers.

The State En­ter­prise is al­ready de­mand­ing that the man­u­fac­tur­ing sec­tor pay 13 per cent more for nat­ur­al gas this year, mov­ing to as high as a 100 per cent in­crease by 2023.

The Sun­day Guardian has learnt that at present man­u­fac­tur­ers pay be­tween US $2 to US $2.50 per mil­lion British Ther­mal Unit (mmb­tu) and the NGC wants this price to es­ca­late over time to US $4 per mmb­tu.

The NGC has been em­broiled in dif­fi­cult ne­go­ti­a­tions with all its cus­tomers as it tries to sig­nif­i­cant­ly in­crease prices be­cause of its new deal with the oil and gas ma­jors that have seen sig­nif­i­cant price in­creas­es for the ag­gre­ga­tor.

The deal which was bro­kered by Prime Min­is­ter Dr Kei­th Row­ley means that the NGC has to pass on price hikes to its cus­tomers, many of whom say they can­not pay the new prices.

This has al­ready led to the loss of scores of high-pay­ing jobs and tens of mil­lions of dol­lars to the Trea­sury, the clo­sure of an am­mo­nia plant, and the planned shut­down of a methanol plant in a week.

Sev­er­al man­u­fac­tur­ers spoke to the Sun­day Guardian on con­di­tion of anonymi­ty for fear of be­ing tar­get­ed. They in­sist­ed that the one com­pet­i­tive ad­van­tage they have is be­ing tak­en away from them by the NGC and they will have no choice but to pack up and leave be­cause they will not be able to com­pete.

They point­ed to the fact that many com­pa­nies have al­ready moved to Ja­maica and South Amer­i­ca where labour laws are less re­stric­tive, pro­duc­tiv­i­ty high­er and the ease of do­ing busi­ness bet­ter, as T&T be­comes in­creas­ing­ly un­at­trac­tive to do busi­ness.

Jobs have al­ready been lost as a re­sult of the chal­lenges fac­ing the sec­tor.

TTMA: Mem­bers wor­ried

Pres­i­dent of the T&T Man­u­fac­tur­ers As­so­ci­a­tion (TTMA) Fran­ka Costel­loe con­firmed to the Sun­day Guardian that her mem­bers are ex­treme­ly wor­ried by the pro­posed price in­crease which has been made retroac­tive­ly to 2019.

“We are ex­cep­tion­al­ly con­cerned about the im­pact, about the cost im­pact, about our abil­i­ty to main­tain com­pet­i­tive­ness, specif­i­cal­ly in the ex­port mar­ket, and our abil­i­ty to re­main com­pet­i­tive in at­tract­ing in­ward in­vest­ments for new man­u­fac­tures and for in­ter­na­tion­al in­vestors to stay in Trinidad and to ex­pand their fac­to­ries,” Costel­loe said in a can­did in­ter­view.

Costel­loe ex­plained that while she did not know the ex­act num­bers, since each man­u­fac­tur­er has in­di­vid­ual con­tracts with the NGC if what she has been told is cor­rect, it could lead to mas­sive lay­offs.

“If we start to re­duce our com­pet­i­tive­ness in the man­u­fac­tur­ing mar­ket, you start to talk about un­em­ploy­ment, you start to talk about in­vestors pulling out.

“I wouldn't be sur­prised that you could an­tic­i­pate the close­down of some of those ma­jor fac­to­ries if there is a 100 per cent in­crease of ma­jor ex­pense items.”

The TTMA pres­i­dent said nat­ur­al gas was T&T’s com­pet­i­tive ad­van­tage over oth­er CARI­COM states, and al­so some South Amer­i­can coun­tries, and for a lot of in­ter­na­tion­al in­vestors and lo­cal man­u­fac­tur­ers who have a sub­stan­tial size and use nat­ur­al gas.

She said the sec­tor was al­ready faced with a sig­nif­i­cant num­ber of tax­es that are work­ing to in­crease the cost of do­ing busi­ness and de­crease the ease of do­ing busi­ness.

She ar­gued: “It is the one thing that we have, it’s not done as yet, so it’s a mat­ter of ne­go­ti­a­tions be­tween NGC and the in­di­vid­ual mem­bers, and the TTMA is meet­ing with the of­fice of the Min­istry of En­er­gy to dis­cuss it. So, we’ll see if we get some head­way.”

Com­pa­nies to be hit hard

Among the hard­est-hit com­pa­nies will be:

•Trinidad Ce­ment Lim­it­ed

•As­so­ci­at­ed Brands Lim­it­ed

•Sev­er­al com­pa­nies that fall un­der the ANSA McAL group in­clud­ing Carib, Carib Glass­works, Abel etc. ANSA McAL is the par­ent com­pa­ny of Guardian Me­dia Lim­it­ed.

“Yes, you are ab­solute­ly cor­rect, those are the big­ger com­pa­nies that are go­ing to be gross­ly af­fect­ed by any price in­crease. You list­ed them all out. It’s a sig­nif­i­cant por­tion of their ex­pense line item.

"This is a big deal, a game-chang­er for them, but it’s neg­li­gent to NGC, it’s .5 per ec­nt of NGC’s nat­ur­al gas sales vol­ume. And that’s where we are go­ing to be dis­cussing with the of­fice of the Min­istry of En­er­gy be­cause we have to sup­port the man­u­fac­tur­ing com­mu­ni­ty to cre­ate a sus­tain­able en­vi­ron­ment in Trinidad. We have to be able to main­tain these jobs. The man­u­fac­tur­ing sec­tor em­ploys 50,000 peo­ple in this coun­try,” Costel­lo said.

'This is a na­tion­al is­sue'

Costel­lo told the Sun­day Guardian that all 150 man­u­fac­tur­ers com­bine make up less than .05 per cent of the NGC’s sales and sure­ly the com­pa­ny was putting an en­tire in­dus­try at risk for a small per­cent­age of its busi­ness.

Asked why the NGC should sub­sidise pri­vate sec­tor com­pa­nies, the TTMA pres­i­dent said, “Why do I go to the Min­is­ter of En­er­gy? I go to the Min­is­ter of En­er­gy to high­light the plight of the man­u­fac­tures in this de­ci­sion and this is a na­tion­al is­sue. This is not just an NGC is­sue or a man­u­fac­tur­ers is­sue, this is a na­tion­al is­sue.

“I agree that every state-owned com­pa­ny, like any com­pa­ny, should be not be run­ning at a deficit, not run­ning at break-even, and state com­pa­nies sub­si­dis­ing to its own per­il def­i­nite­ly should not be a strat­e­gy.

"We sup­port com­pa­nies to al­ways run at a prof­itable state, it’s noth­ing dif­fer­ent than what we would say for the NGC. But at the same time, this is a group that con­sti­tutes less than one per cent of vol­ume sales and is made up of 150 mem­bers and this can have a mas­sive im­pact on the en­tire na­tion.

"If we start to re­duce our com­pet­i­tive­ness in the man­u­fac­tur­ing mar­ket, you start to talk about un­em­ploy­ment, you start to talk about in­vestors pulling out. We’re talk­ing about sub­si­dis­ing .52 per cent for NGC’s ex­is­tence.”

Ques­tions to Enill

The fol­low­ing ques­tions were sent to the NGC Chair­man Con­rad Enill.

1) Has the NGC in­di­cat­ed to man­u­fac­tures that the price they pay for nat­ur­al gas will be in­creased ef­fec­tive 2019?

2) What per­cent­age of to­tal gas sales by the NGC is sold to man­u­fac­tur­ers?

3) Why the need for dou­ble-dig­it price in­creas­es at this time?

4) Is the NGC con­cerned by the po­ten­tial im­pact of this on the sec­tor and jobs?

Enill sug­gest­ed that the ques­tions be sent to the Head of Cor­po­rate Com­mu­ni­ca­tions at the NGC Lisa Bur­kett.

NGC: We will con­tin­ue to ne­go­ti­ate in good faith, we will not con­duct ne­go­ti­a­tions via the me­dia

In a re­sponse, Bur­kett said "NGC has been in dis­cus­sions with the LIC sec­tor for over 18 months and is still in dis­cus­sions with them. We all recog­nise that there is a chang­ing en­er­gy land­scape, not just in Trinidad and To­ba­go, but al­so glob­al­ly.

"We are in ac­tive ne­go­ti­a­tions at this point and would not con­duct ne­go­ti­a­tions via the me­dia.

"NGC ac­knowl­edges the im­por­tance of the LIC sec­tor and has ap­proached its ne­go­ti­a­tions in that con­text. We will con­tin­ue to ne­go­ti­ate in good faith."