Gas prices in Trinidad & Tobago

[sMASH]

Lead by example: if people purchasing power is reduced, let them cut back theirs!
All Ministers, 20% reduction in all state derived income

[DVSTT]

I find ministers could pay tax.

[zoom rader]

PNM doing a good job and PNM ppl love all their new taxes and increase cost of living.

PP was too kind to PNM Ppl

[Miktay]

PNM doing a good job and PNM ppl love all their new taxes and increase cost of living.

PP was too kind to PNM Ppl

They were killing we with kindness...

[pete]

I wonder if the penalty for being unpatriotic would be to put more buses and have very low fares so less people use maxi taxis.

[Allergic2BunnyEars]

Fuel subsidy headed for history books?

http://m.guardian.co.tt/columnist/2016- ... tory-books




Last Friday the Minister of Finance announced further increases to the prices of super gasoline and diesel. This came as no surprise. As I had mentioned before, the subsidy on petroleum products has its basis in the Petroleum Production Levy and Subsidy Act of 1974.

The removal of the subsidy can only be effected by the repeal of this Act or amendments to the relevant sections. The Minister of Energy can however change the prices of petroleum products by Legal Notice.

Section 9 of the Act creates the Levy. The Levy is used to offset the subsidy. The oil companies that produce crude oil pay the Levy. It is calculated as four per cent of the gross income from the production of crude oil. Smaller oil companies that produce less than 3,500 barrels of oil per day are exempted from paying the levy. The Minister of Finance has not told us what he plans to do with the Levy going forward. If he plans to dismantle the subsidy then the levy should also go.

For years the country’s leading economic minds had been saying the subsidy had to go. Past Governments, including the one I was part of, kept subsidy in place. The opportunity to start the process of removing the subsidy presented itself when oil prices collapsed in 2014/2015 thus making its removal less painful. Mr Imbert has seized the opportunity and has bitten the bullet.

With regard to diesel, in the last seven months, the retail price has moved from TT$1.50 to TT$2 per litre. This is a 33 per cent increase. The price of diesel had been TT$1.50 per litre since 2003. Keeping the price of diesel the same for 12 years came at a significant cost. It promoted a culture of waste and created the black market for diesel.

Can you imagine KFC keeping its prices the same for 12 years? On the other hand it may be argued that the majority of goods and services are transported using diesel—powered trucks and vans and therefore the subsidy helps to keep inflation down. While there will be an initial inflationary impact from the fuel prices increases, the economy will eventually find an equilibrium point again.

The other fuel that was impacted upon was super gasoline. This is the most used fuel in T&T. It accounts for 53 per cent of the 1.3 million litres of liquid fuel the nation consumes on an annual basis. By increasing the price of super gasoline from TT$2.70 per litre to $3.58 per litre, the Minister has totally removed the subsidy on this fuel.

In fact, the Minister may have gone too far. He told the Parliament that US$45 per barrel for crude oil equates to a retail price of TT$3.61 per litre for super. He then set the retail price just below that at TT$3.58 per litre. However, oil is not US$45 per barrel. It is US$40 dollars a barrel.

If you do the adjustment the retail price of diesel should be about TT$3.22 per litre. This means that the country is being overcharged for super gasoline. Of course that situation could change if oil prices increase.

In T&T, premium gasoline remains at TT$5.75 per litre. It accounts for just three per cent of the liquid fuels we consume. It is the preferred or recommended fuel for high performance vehicles such as Audis, BMWs etc. At US$40 per barrel for crude oil, premium is overpriced by about TT$2 per litre. If the Government is moving towards a market-based approach it should consider pricing premium at a price more reflective of market conditions.

With regard to incentives, the Finance Act of 2010 had introduced incentives for CNG vehicles. These incentives expired on December 2015 but were recently extended to 2018. The Finance Act of 2015 removed Motor Vehicle Taxes on Hybrids up to 1600 cc’s and on electric cars. The Minister has now gone a step further and announced that he would remove all taxes on CNG, Hybrid and electric cars. It is good to see that there is continuity of policy in this area.

It is also good to see private sector companies such as Automotive Components Limited, Classic Motors, Dumore Enterprises and Sterling Motors taking the initiative on CNG. With regard to Hybrids, Toyota is already selling their Hybrids into the local market. The Ministry of Energy is the owner of two Hybrid vehicles.

Given the move to a more market-based approach to pricing fuel, the Government should also have a serious look at the retail margins that gas stations get as well as the wholesale margins that are afforded to NP and Unipet with the view of improving both these margins. Improving the retail margin will help some gas station owners stay in business. Some gas stations are on the brink of closure given the increases over the years in minimum wage, green fund levy and business levy.

I will dedicate another column to CNG as it has been incorrectly said that nothing was done in the last five years.

[jhonnieblue]

Nice article.like how he did emphasize that premium is overpriced

[BoostJunkieXL]

hmm...good read...very informative.

[Miktay]

BTW mango tree mechanic kno how 2 fix hybrid & electric?

[Habit7]

The error Ramnarine is making though is that he is making fuel prices directly proportional to crude oil price. Crude oil is just one component which has to factored into price with other considerations such as refinery production, taxes and margins to name a few. So even if we are given a true $45 crude oil price of fuel, a $40 crude oil price can't be 9% less, as what he calculated.

[kjaglal76v2]

so you know better than the former energy minister, who actually educated & experienced in the field of such?


udfr plz

[EFFECTIC DESIGNS]

BTW mango tree mechanic kno how 2 fix hybrid & electric?

The only thing these mango tree mechanic could do here is change bushings and ball joints etc. I had a 1993 EG8 Civic at one point that had issues starting and not a single mango tree or actual galvanize garage mechanic could fix that issue. But you want these people to fix modern hybrid and electric?

[Miktay]

BTW mango tree mechanic kno how 2 fix hybrid & electric?

The only thing these mango tree mechanic could do here is change bushings and ball joints etc. I had a 1993 EG8 Civic at one point that had issues starting and not a single mango tree or actual galvanize garage mechanic could fix that issue. But you want these people to fix modern hybrid and electric?

A couple of them could do wheel align with string.

But nowadays everything iz integrated circuit and computer controlled. They ent know that.

I keeping my old corolla.

[Numb3r4]

Well the solution is quite evident.

We have a large amount of Chinese restaurants here in Trinidad, right?....not to mention numerous fast food outlets, why not collect the oil and convert your cars to run on the oil from those establishments....

The vegetable oil they use should work well if your car is a diesel and the weather stays warm.

See then you could order the KFC $20.00 special (1 piece chicken, fries, biscuit & drink) and get a full tank.

[Morpheus]

The struggle.......

I would gladly pay $3.58/liter

[ingalook]

They are conveniently leaving out the Levy (paid by oil companies) and also adding VAT in the calculation of the "Subsidy" the $600 million figure they are quoting is bogus - there might actually have been no subsidy at all in operation @ $40 a barrel -however the levy is dependent on the profitability of foreign oil companies stationed here

Drop premium to market price ($3.75 or so) as I called for under PP I call for again under the PNM -

Stop lying to the population!

Stop breaking the law!

Stop profiting from the sale of our natural resource to citizens!

[De Dragon]

so you know better than the former energy minister, who actually educated & experienced in the field of such?


udfr plz

Well K. Ramnarine is/was UNC/PP so in Habit7 warped view, he eh qualified.

[ingalook]

The Minister of Finance in his mid-term review of the 2015-16 budget, raised the prices of super gasoline and diesel by 15 per cent in an attempt to bring them into line with the current international prices.

The intention is to allow the prices of oil-based fuels in this country to fluctuate in tandem with the international prices; ie there should be no “subsidy”—defined as the difference between local (the lower) and international prices. One reason for doing this is that Petrotrin is said to be supplying the local market with fuels refined from crude oil imported at international prices. However, a paper delivered at the T&T Energy Conference 2015, Operating in a Low Oil Price Environment by Colin Ramesar, stated that the Petrotrin’s refinery has a throughput capacity of 168,000bbls/dy of crude oil and was operating at 111,537,55 per cent of which was imported and the rest from its own local production.

The paper reported that Petrotrin sells 25 per cent of its total refined products on the local market and exports the rest—regionally (17 per cent), extra regionally (15 per cent), internationally (40 per cent) with bunkers (three per cent). Hence it would appear that the local crude oil production of Petrotrin (all of which is used in the refinery) is more than sufficient to supply the market with oil-based fuels.

The intention behind tying the local prices of fuels to those in the international market suggests that the population in T&T should pay the same prices as a country that has no oil and imports its fuels; ie the general public should not benefit from our God-given patrimony in the pricing of fuels. Yet Government is extracting from the energy sector producers royalties (an entitlement of the owner of the resource -usto a part of the total production), in part government share of crude oil produced or taken as part of profits in production sharing contracts and petroleum levy, all of which are compensations to the State, to us, for the commercial depletion and export of this patrimony.

The economic prices at which the population should buy fuels should be an assessed cost to Petrotrin, including associated profit, to produce, refine the crude oil and get the products distributed locally. These economic prices at all time will be below the international prices, more so would be fairly static and not vary in the short- to mediumterm with fluctuations in the international prices. Since Petrotrin as a producer pays royalties on all its production it expects to be paid international prices for its products sold locally. Hence the prices to Petrotrin should be made up of the economic prices paid directly by the population and the balance by the Government in lieu of royalties etc it has collected. This is not a subsidy by government.

Separate and apart from the above argument is the concern that the prices in the local market have led to poor consumption habits which are of no benefit to the economy. The problem appears to be congestion on the roads because of too many cars (new and foreign used), poor public transportation and road systems—supported by the Government’s intention to build more roads and reduction in maxi taxis’ taxes. Also the removal of taxes on electric and hybrid cars and the imposition of more taxes on cars with larger engines, seem to suggest a desire to reduce the local use of fossil fuels— our carbon footprint? What one can query is whether the direct cause of the transportation problem is “cheap fuel” or rather is it cheap cars and poor transportation and road systems? If it is still deemed necessary to tax fuels in T&T to reduce their consumption or even raise funds for government spending then tying these prices to the varying international prices makes little economic sense. Also we have the additional burden on the ministry to monitor the international prices and continually inform the distributors of the prices as they change internationally.

Mary K King
St Augustine

[De Dragon]

Interesting, but then habit7, RASC and eliteauto will say Mary King is UNC so she only making mischief.............

[eliteauto]

Interesting, but then habit7, RASC and eliteauto will say Mary King is UNC so she only making mischief.............

nah not mischief, she talking rubbish

[desifemlove]

taxes...i ent bothered. how do people tink the fiscal hole gonna be covered? PNM won't stop this from happening again by getting new industry for FOREX.

[Habit7]

Interesting, but then habit7, RASC and eliteauto will say Mary King is UNC so she only making mischief.............

It is surprising that for someone who bemoans that ppl make assumptions of him, likes to make assumption of others.

Mary King is not UNC, she is COP. Plus the UNC of 2010-2015 saw it fit through their finance minister to start to remove fuel subsidies. In fact in Kamla's Plan their manifesto it proposed total removal of subsidy on premium and pegging the other prices to a $45 oil price. PNM is doing the same, just one better by pegging the price to a $40 oil price #letsdothis

It is scary that Mrs. King as an educator sees it fit for us to use up all our local oil products locally in lieu of export so that it would be cheaper. She fails to understand these products fetch a greater value internationally and provide for the lion share of foreign exchange which would redound to the growth of our economy. It is like owning a parlour and dipping into your inventory without abandon because it is yours. However you can sell your product, get a profit and buy more product and improve yourself.

TT still enjoys one of the cheapest fuel prices in the world and is cheaper than many other countries with larger reserves. So yes she is talking rubbish.

[Miktay]

The Minister of Finance in his mid-term review of the 2015-16 budget, raised the prices of super gasoline and diesel by 15 per cent in an attempt to bring them into line with the current international prices.

The intention is to allow the prices of oil-based fuels in this country to fluctuate in tandem with the international prices; ie there should be no “subsidy”—defined as the difference between local (the lower) and international prices. One reason for doing this is that Petrotrin is said to be supplying the local market with fuels refined from crude oil imported at international prices. However, a paper delivered at the T&T Energy Conference 2015, Operating in a Low Oil Price Environment by Colin Ramesar, stated that the Petrotrin’s refinery has a throughput capacity of 168,000bbls/dy of crude oil and was operating at 111,537,55 per cent of which was imported and the rest from its own local production.

The paper reported that Petrotrin sells 25 per cent of its total refined products on the local market and exports the rest—regionally (17 per cent), extra regionally (15 per cent), internationally (40 per cent) with bunkers (three per cent). Hence it would appear that the local crude oil production of Petrotrin (all of which is used in the refinery) is more than sufficient to supply the market with oil-based fuels.

The intention behind tying the local prices of fuels to those in the international market suggests that the population in T&T should pay the same prices as a country that has no oil and imports its fuels; ie the general public should not benefit from our God-given patrimony in the pricing of fuels. Yet Government is extracting from the energy sector producers royalties (an entitlement of the owner of the resource -usto a part of the total production), in part government share of crude oil produced or taken as part of profits in production sharing contracts and petroleum levy, all of which are compensations to the State, to us, for the commercial depletion and export of this patrimony.

The economic prices at which the population should buy fuels should be an assessed cost to Petrotrin, including associated profit, to produce, refine the crude oil and get the products distributed locally. These economic prices at all time will be below the international prices, more so would be fairly static and not vary in the short- to mediumterm with fluctuations in the international prices. Since Petrotrin as a producer pays royalties on all its production it expects to be paid international prices for its products sold locally. Hence the prices to Petrotrin should be made up of the economic prices paid directly by the population and the balance by the Government in lieu of royalties etc it has collected. This is not a subsidy by government.

Separate and apart from the above argument is the concern that the prices in the local market have led to poor consumption habits which are of no benefit to the economy. The problem appears to be congestion on the roads because of too many cars (new and foreign used), poor public transportation and road systems—supported by the Government’s intention to build more roads and reduction in maxi taxis’ taxes. Also the removal of taxes on electric and hybrid cars and the imposition of more taxes on cars with larger engines, seem to suggest a desire to reduce the local use of fossil fuels— our carbon footprint? What one can query is whether the direct cause of the transportation problem is “cheap fuel” or rather is it cheap cars and poor transportation and road systems? If it is still deemed necessary to tax fuels in T&T to reduce their consumption or even raise funds for government spending then tying these prices to the varying international prices makes little economic sense. Also we have the additional burden on the ministry to monitor the international prices and continually inform the distributors of the prices as they change internationally.

Mary K King
St Augustine

Mary King ever hear bout opportunity cost?

If i sell for $10 when i could get $15...thaz $5 less profit.

[ingalook]

Interesting, but then habit7, RASC and eliteauto will say Mary King is UNC so she only making mischief.............

It is surprising that for someone who bemoans that ppl make assumptions of him, likes to make assumption of others.

Mary King is not UNC, she is COP. Plus the UNC of 2010-2015 saw it fit through their finance minister to start to remove fuel subsidies. In fact in Kamla's Plan their manifesto it proposed total removal of subsidy on premium and pegging the other prices to a $45 oil price. PNM is doing the same, just one better by pegging the price to a $40 oil price #letsdothis

It is scary that Mrs. King as an educator sees it fit for us to use up all our local oil products locally in lieu of export so that it would be cheaper. She fails to understand these products fetch a greater value internationally and provide for the lion share of foreign exchange which would redound to the growth of our economy. It is like owning a parlour and dipping into your inventory without abandon because it is yours. However you can sell your product, get a profit and buy more product and improve yourself.

TT still enjoys one of the cheapest fuel prices in the world and is cheaper than many other countries with larger reserves. So yes she is talking rubbish.

It is a shame that Dr. Eric Williams AND Colm Imbert ( from 2012) agreed so strongly with her

[Allergic2BunnyEars]

Interesting, but then habit7, RASC and eliteauto will say Mary King is UNC so she only making mischief.............

It is surprising that for someone who bemoans that ppl make assumptions of him, likes to make assumption of others.

Mary King is not UNC, she is COP. Plus the UNC of 2010-2015 saw it fit through their finance minister to start to remove fuel subsidies. In fact in Kamla's Plan their manifesto it proposed total removal of subsidy on premium and pegging the other prices to a $45 oil price. PNM is doing the same, just one better by pegging the price to a $40 oil price #letsdothis

It is scary that Mrs. King as an educator sees it fit for us to use up all our local oil products locally in lieu of export so that it would be cheaper. She fails to understand these products fetch a greater value internationally and provide for the lion share of foreign exchange which would redound to the growth of our economy. It is like owning a parlour and dipping into your inventory without abandon because it is yours. However you can sell your product, get a profit and buy more product and improve yourself.

TT still enjoys one of the cheapest fuel prices in the world and is cheaper than many other countries with larger reserves. So yes she is talking rubbish.

It is a shame that Dr. Eric Williams AND Colm Imbert ( from 2012) agreed so strongly with her

It is a shame you misinterpret what they said. That is why Petrotrin is paid the true price of fuel even after the citizens pay a lower price.

[Redman]

so you know better than the former energy minister, who actually educated & experienced in the field of such?


udfr plz

The minister has his agenda.So he is talking his book.

He DID NOTHING regarding the retail margin in his tenure.

And the volume of fuel used annually in Tdad and Tobago is closer to 1.3 BILLION liters.

[Redman]

Interesting, but then habit7, RASC and eliteauto will say Mary King is UNC so she only making mischief.............

nah not mischief, she talking rubbish

Why you say that?

[Redman]

They are conveniently leaving out the Levy (paid by oil companies) and also adding VAT in the calculation of the "Subsidy" the $600 million figure they are quoting is bogus - there might actually have been no subsidy at all in operation @ $40 a barrel -however the levy is dependent on the profitability of foreign oil companies stationed here

Drop premium to market price ($3.75 or so) as I called for under PP I call for again under the PNM -

Stop lying to the population!

Stop breaking the law!

Stop profiting from the sale of our natural resource to citizens!

So here is the joke.

Min of Energy Consolidated indicates thatin 2015 (using 159 liters to a BBL) Petrotrin sold:

a) 1,371,815,589 liters of liquid fuels to the local market.
b) Of that 727,368,873 liters of that was Motor Gasoline.

B is equal to exactly 53% of A. Which as the minister stated the same proportion that Super represents to the total.

So we import all the Premium??.

If so they technically not profiting from our Natural Resources-cuz they importing the Premium.

[Allergic2BunnyEars]

[desifemlove]

Interesting, but then habit7, RASC and eliteauto will say Mary King is UNC so she only making mischief.............

It is surprising that for someone who bemoans that ppl make assumptions of him, likes to make assumption of others.

Mary King is not UNC, she is COP. Plus the UNC of 2010-2015 saw it fit through their finance minister to start to remove fuel subsidies. In fact in Kamla's Plan their manifesto it proposed total removal of subsidy on premium and pegging the other prices to a $45 oil price. PNM is doing the same, just one better by pegging the price to a $40 oil price #letsdothis

It is scary that Mrs. King as an educator sees it fit for us to use up all our local oil products locally in lieu of export so that it would be cheaper. She fails to understand these products fetch a greater value internationally and provide for the lion share of foreign exchange which would redound to the growth of our economy. It is like owning a parlour and dipping into your inventory without abandon because it is yours. However you can sell your product, get a profit and buy more product and improve yourself.

TT still enjoys one of the cheapest fuel prices in the world and is cheaper than many other countries with larger reserves. So yes she is talking rubbish.

is there a discernible difference between them? was there then? or only there is now cos Prakash/ass Ramadhar resign, and he say there's no Partnership no more?