'Improve
water supply or maintain cheap gas?': Govt's
$2b dilemma
Port Spain
Petroleumworldtt.com
01 27 08
Motorists could find themselves paying more for
gasoline and diesel at the pump sometime in the
not too distant future but Energy Minister Conrad
Enill
says they are already doing so out of their taxes anyway.
In an interview yesterday, Enill said the Government
was in the early stages of examining the possibility
of a reduction in the $2 billion a year State subsidy
on gasoline and diesel which is paid for out of
the taxes it collects.
He said the Government had no choice but to deliberate
the matter given the record high price of oil that
was now hovering at around US$90 a barrel.
"We are conducting a preliminary examination
of the issue in relation to expenditure in other
areas of the economy," Enill said.
"A subsidy simply says that instead of the
people getting it in increased taxes, they are
getting it in reduced fuel. They are paying for
it (increased fuel cost)," Enill also said.
Enill's comments followed Trade and Industry Minister
Keith Rowley statement in the Parliament last Friday
that the time had come for the Government to reconsider
the subsidy in light of record high global oil
prices as it was buying oil at the international
price to keep the State-owned refinery's operating
at full capacity.
The fuel subsidy has been the sole protection
to drivers in Trinidad and Tobago from the negative
effects of any fluctuations in the international
oil markets.
In Trinidad and Tobago it now costs drivers TT$3
per litre to fill up the tank of a gasoline fuelled
vehicle.
In nearby Barbados, the cost of filling up the
tank of a gasoline vehicle is BDS$2.30 (TT$7.21)
per litre.
Enill said the record high oil prices are forcing
the Government to make some hard choices regarding
the use of subsidies and gave the example of the
ambitious restructuring plans for WASA which is
projected to cost a total of US$2 billion (TT$12.5
billion).
Prime
Minister Patrick Manning had said that his administration "had no option" but
to review water rates given the $1 billion annual
subsidy the State pays for the supply of water.
"The gas subsidy is now at $2 billion. The
government now finds itself having to answer a
particular question," Enill said.
"Is
the $2 billion a year better provided to water
supply for everybody or for cheap gas
and continuing the situation where people can travel
at a very low cost."
He said, however, said the issue was really one
of economic policy that was being discussed within
the Finance Ministry and he was only speaking from
the standpoint of the energy side of the equation.
"Right
now, we have an increase in oil prices and, therefore,
the increase in oil prices is going
to find itself in the finished product.
So
the question is not about increases in prices,
the question is about the use of the subsidy it
is not about price increase. Prices are increasing,
so the subsidy is increasing," Enill also
said.
Story
by Juhel
Browne from Trinidad Express
Trinidad
Express
Monday,
January 21st 2008
Copyright
©2007 Petroleumworld. All Rights Reserved.
