Opinion
- Editorial- Commentary
Raffique
Shah:
Reduce
gas subsidy, boost food production
RECENTLY, Trade and Industry Minister Dr Keith
Rowley hinted that the Government may soon need
to reconsider its $2 billion a year fuel subsidy.
Reaction among the population ranged from grumbling
to expressions of outrage, so much so that another
minister denied any such move was being considered.
I beg to differ. The Government must not only cut
back on certain subsidies it doles out, but it
must determine where cuts are justified and where
it needs to enhance state assistance.
Before erupting into anger over cut backs in hand-outs,
people must ask themselves who benefits from what,
and who will stand to lose if some subsidies are
reviewed. Let's start with motor vehicles. In this
country, where trying to get accurate statistics
is akin to pulling teeth, one assumes there are
between 350,000 and 400,000 vehicles on the nation's
roads. One might also assume that 20 per cent of
these are commercial or hired vehicles, with the
remainder being privately owned.
With 400,000 vehicles, the average annual subsidy
amounts to $5,000, while at 350,000 it is approximately
$5,700.
If the Government were to start by cutting 25
per cent off subsidised fuels, the average additional
payment per year per vehicle would be $1,400. That
cannot, by any stretch of the imagination, be described
as outrageous. If vehicle owners cannot spend just
over $100 per month more for the privilege of driving
on the nation's limited road network, then maybe
they do not qualify for owning vehicles!
More than that, truckers, who tend to complain
the most, and who swear that the prices of goods
and services would rise substantially with any
increase in fuel price, cannot justify their claims.
Not when their increases in diesel cost would be
no more than $100 per truck per year!
Now, what should that saving of $250 million be
used for? I would venture to answer in one word:
food! Food is far more vital to the survival
of everyone, truckers included, than fuel. Realistically,
the world is facing rising food prices and shortages
of certain basics. Would it not be wiser to channel
what is wasted on vehicles on securing adequate,
reliable supplies of food, so that not even the
poorest in the nation starve?
The fuel subsidy can be further reduced, say,
two years later, by another 25 per cent. I shall
not argue for a complete removal since I think
as an oil-producing country, our citizens must
reap some benefits from the largesse this resource
brings to us. But we can neither afford, nor should
we allow, fuels to take precedence over food.
Large oil-producing countries like Venezuela (where
gasoline retails at TT$1 per gallon), Iran ($2)
and Libya ($2) can have their cake and eat it,
in a manner of speaking. They rake in tens of billions
of dollars annually from oil, their production
levels being well over two million barrels a day.
Ours stands at a paltry 140,000 barrels, much of
which is exported while we import crude at world
market prices to process at the refinery.
If we pour an additional $500 million a year into
food production, with proper planning and execution,
we can make available a wider variety of local
foods and fruits, and at costs that make them affordable
to even the poorest in the society. Should we not
think of feeding our people as the number one priority?
Of course, cutting back on fuel subsidies is not
a solution to either the food crisis or the traffic
horrors motorists are subjected to.
Before subsidies are cut, public transport must
be enhanced. The Government is still dreaming of
a rapid rail system. Works Minister Colm Imbert,
who had all but assured us that the trains would
be up-and-running in a year or two, now says the
designs will cost US$67 million, and take 18 months
to be completed. By the time the real price-tag
and time-line hits him, he would abandon rail and
probably burrow himself beneath the putrid waters
of the Gulf to escape angry Trinis!
There are such simple, much less costly alternatives
to rapid rail, that it defies logic why the Government
would want to go down that track. Many experts
have pointed to the Bus Rapid Transit system,
which would require infinitely less capital and
recurrent expenditure, and which could be ready,
in stages, starting within one year. Two "busways" running
parallel to both lanes of the Butler/Hochoy highways,
and restoring the PBR to a bus-only freeway in
addition to freeing it from traffic lights (by
over- or underpasses), would work wonders.
There
are other subsidies that also need to go: why
is URP still
necessary in an era of full employment?
Its very name is an anachronism in a period of
full employment. Channel that billion-dollar-plus "subsidy" enjoyed
by the young and lazy towards easing the everyday
burdens of senior citizens instead. The ceiling
for old age pension should be raised to $60,000
a year and the quantum itself raised generously.
Disability and other social benefits should be
what we subsidise. Not people with "gas brains" and
those who are too damn lazy to work for a living.
Raffique
Shah is
a columnist of the Trinidad Express.
Petroleumworld does not necessarily share these
views.
This
commentary was originally published by Trinidad Express,
Sunday,
February 10th 2008.
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Petroleumworld
News 02/10/08
Copyright© 2008
Raffique
Shah. All
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