The Trinidad and Tobago National Petroleum Marketing Company Ltd (NP) will remain in business even though it will dispose of all its gas stations, said Energy Minister Franklin Khan, in a virtual address to the Energy Chamber Thursday evening.
Khan explained that NP’s future role will be as a wholesaler to different gas stations.
The margin the company will make, said Khan, will be as a wholesaler.
In turn, once the gas stations are sold with existing dealers having the first rights to purchase, they can determine their own prices in a competitive environment, said Khan.
The decision to liberalise the fuel market was announced by Finance Minister Colm Imbert in his budget presentation last Monday.
Imbert said come January 2021 the fuel subsidy will be removed, prices will be subject to market forces and the Government will sell all gas stations owned by the National Petroleum to the private sector with first preference given to existing dealers and concessionaires.
He pointed out that at current international oil prices, subsidies do not arise in the sale of premium gasoline or super gasoline, but they continue to prevail in the sale of diesel, kerosene and LPG (cooking gas).
“We are of the view that in the context of the projected international oil prices, the fuel market should be liberalised. Under this arrangement, which is targeted for introduction in January 2021, the fixed retail margins for all liquid petroleum products will be removed; Petroleum retailers and dealers will now be allowed to fix their own margins. Wholesale margins will remain fixed for the time being and an appropriate but reasonable tax introduced to compensate for the current fuel surplus that is generated on the sale of gasoline, because of depressed oil prices,” Imbert had said.
Imbert said he expects little or no increase in the price of motor fuels at current oil prices. “However, it must be noted that if the price of oil recovers, the price of gasoline and diesel will naturally increase proportionately,” he had said.
According to its website, NP has about 160 gas stations.
Meanwhile the Energy Minister cautioned members of the Chamber who do and are seeking to do business with Guyana to be sensitive of the feelings of Guyanese businessmen.
“If you are not sensitive when you enter Guyana, the Guyanese will start to start to feel threatened. So, that is why it calls for diplomacy in how we move into a country,” he said in response to a question on whether under the CSME, energy workers will be able to travel as freely to work.
Khan said there would need to be dialogue with the Energy Minster of Guyana as well as the President of Guyana.
“A Trinidad invasion of Guyana, it will not go down well. I know what I’m telling you. I’ve had serious discussions at the highest level and that is a concern. Okay. For those of you who do business in Guyana, I urge you to be sensitive to that sentiment,” he said.
The issue of energy workers said Khan has to de dealt with at the level of Caricom.
“I know we have this movement of skills. As we speak, there is a free movement of skills for calypsonins and entertainers, to teachers and a couple professionals. But we now how to expand that basket of skills to have free movement to energy sector workers, bearing in mind that there will be push back from Caricom countries,” he said.
Part of that push back, he said, was the perception that T&T business want to dominate the market.
Khan noted these there exists an MOU with T&T and Guyana for energy cooperation that was signed in early 2019.
He said once the Covid restriction are lifted, he plans to activate that and visit the country.
Meanwhile, Dwight Mahabir, the chief executive of Damus Ltd and former deputy chairman (Energy Services) at the Energy Chamber was selected as its new chairman.