KEVON FELMINE

kevon.felmine@guardian.co.tt

Last Ju­ly, Min­is­ter of Fi­nance Colm Im­bert said the Gov­ern­ment would con­tin­ue to sub­sidise the price of diesel un­til the econ­o­my im­proves. But with rev­enue fore­cast to im­prove in the next year, the Gov­ern­ment is mov­ing for­ward with the lib­er­al­i­sa­tion of the lo­cal fu­el mar­ket.

How­ev­er, if you fall with­in low-in­come or vul­ner­a­ble groups, Im­bert said the Gov­ern­ment is im­ple­ment­ing a fu­el Cash Card Pro­gramme. 

“A Fu­el Cash Card will be made avail­able to vul­ner­a­ble groups to off­set the cost of in­creas­es in the price of mo­tor fu­els,” Im­bert said dur­ing his pre­sen­ta­tion of the 2022 Bud­get.

In the 2021 Bud­get state­ment, Im­bert com­mit­ted to re­mov­ing the fu­el sub­sidy, which will see the de­par­ture of fixed re­tail mar­gins for pre­mi­um and su­per gaso­line and diesel.

Pe­tro­le­um re­tail­ers would then set their prices at the pumps. In the past year, the Gov­ern­ment has amend­ed the Pe­tro­le­um Act and the Pe­tro­le­um Pro­duc­tion Levy and Sub­sidy Act to im­ple­ment the lib­er­al­i­sa­tion.

Yes­ter­day, Im­bert an­nounced that the Gov­ern­ment was now com­plet­ing the de­sign of the in­fra­struc­ture to be­gin the process. It is a move that will in­crease prices, ex­ac­er­bat­ing the al­ready ris­ing cost of liv­ing.

How­ev­er, speak­ing af­ter­wards Pe­tro­le­um Deal­ers’ As­so­ci­a­tion pres­i­dent Ra­bindranath Nar­i­nesingh said Im­bert was skil­ful enough to analyse the sit­u­a­tion and an­nounce a mea­sure for those who may not be able to with­stand the in­creased costs.

“If you feel you are on the fringe of the econ­o­my and are un­able to pay for fu­el, you will get a re­bate when you ap­ply for that card. I think he set pa­ra­me­ters for peo­ple to ob­tain that card,” Nar­i­nesingh said.

He said pe­tro­le­um deal­ers were anx­ious and look­ing for­ward to the Gov­ern­ment ex­pe­dit­ing the process, adding the as­so­ci­a­tion is will­ing to work with the Min­istry of En­er­gy and En­er­gy In­dus­tries to en­sure it is prop­er­ly done. 

“To­geth­er with the sale of the gas sta­tions, we are look­ing for­ward to hav­ing all these mat­ters re­solved. It is not long over­due, but we would like it to be ex­pe­dit­ed in a man­ner to ben­e­fit all par­ties: cit­i­zens, pe­tro­le­um deal­ers and the Gov­ern­ment.”

Im­bert yes­ter­day said the Gov­ern­ment was com­mit­ted to re­duc­ing T&T’s de­pen­dence on oil and gas in its di­ver­si­fi­ca­tion. He said the Gov­ern­ment wish­es to de­vel­op a non-oil sec­tor and to low­er oil fi­nan­cial de­pen­den­cy. In its place, it will cre­ate a vi­able non-oil, mod­ern econ­o­my that can sup­port high-in­come lev­els.

How­ev­er, Im­bert said the volatile na­ture of oil and gas rev­enues cre­ates in­sta­bil­i­ty to growth, in­comes and em­ploy­ment.

BPTT's Cassia C platform as it arrived in T&Tearlier this year.

“De­spite this re­peat­ed ob­jec­tive, our oil and gas econ­o­my, like many oth­ers in the glob­al econ­o­my, has not been suc­cess­ful at di­ver­si­fy­ing ful­ly. There are pub­lic pol­i­cy dilem­mas for which there is no easy an­swer and for this rea­son, I am of the view that the en­er­gy sec­tor should not on­ly be seen as part of the prob­lem, but al­so part of the so­lu­tion.”

Im­bert said nat­ur­al gas pro­duc­tion de­creased in 2020, but is pro­ject­ed to rise in 2021 to 2.77 bil­lion scf. The pro­jec­tion for 2022 is 3.37 bil­lion scf. He said the pro­jec­tion for the pro­duc­tion of oil and con­den­sate pro­duc­tion was 64,000 bpd by the end of 2021, with a fur­ther in­crease to 86,000 bpd in 2022.

For­mer Min­is­ter of En­er­gy and En­er­gy Af­fairs Kevin Ram­nar­ine be­lieves the an­tic­i­pa­tion of in­creased oil and gas pro­duc­tion will hap­pen. How­ev­er, Ram­nar­ine said the quan­tum of in­crease was ques­tion­able.

“I think it will be a tepid re­cov­ery but it is pos­i­tive. I think his rev­enue fig­ure is re­al­is­tic,” Ram­nar­ine said af­ter the Bud­get.

With high gas prices in Eu­rope, he said this is good, as T&T has a mar­ket there for Liq­ue­fied Nat­ur­al Gas.

He al­so not­ed that am­mo­nia prices were over US$600 per tonne be­cause of plant clo­sures and the high cost of nat­ur­al gas in Eu­rope, and pro­duc­tion is­sues in the US Gulf Coast caused by a re­cent hur­ri­cane.

How­ev­er, he ques­tioned how long the pro­duc­tion in­creas­es could be sus­tained, doubt­ing that they could con­tin­ue be­yond 2023.

He was al­so hap­py with the an­nounce­ment that the min­istry would as­sess the com­pet­i­tive­ness of the en­er­gy sec­tor fis­cal regime.

He said the sec­tor was not com­pet­i­tive enough to sus­tain the lev­els of nat­ur­al gas and oil pro­duc­tion. 

Im­bert said if in­vestors be­lieve the tax­a­tion regime was skewed in favour of the Gov­ern­ment or not eco­nom­i­cal­ly fea­si­ble, they will not par­tic­i­pate.

He an­nounced that his min­istry will col­lab­o­rate with the Min­istry of En­er­gy and En­er­gy In­dus­tries to re­view the oil and gas tax­a­tion regime to en­sure that T&T re­mains an in­ter­na­tion­al­ly com­pet­i­tive hy­dro­car­bon province. The Gov­ern­ment in­tends to re­view the ap­pro­pri­ate­ness of the Pe­tro­le­um Prof­its Tax and Sup­ple­men­tal Pe­tro­le­um Tax and Roy­al­ty, both on­shore and off­shore for large and small pro­duc­ers, he said. 

“We shall al­so ex­am­ine the rel­e­vance of the ex­ist­ing suite of fis­cal in­cen­tives, li­cens­ing regimes, and pro­duc­tion shar­ing con­tracts.”