FFOS: Govt must explain new gas price

FISHERMEN and Friends of the Sea (FFOS) has called on government to explain why the National Gas Company (NGC) is paying one of its natural gas suppliers a reported increase of 64 per cent. In a media release signed by FFOS corporate secretary Gary Aboud yesterday, the environmental activism organisation said this increase would impact negatively on NGC’s profitability.

“This sudden exorbitant 64 per cent price increase is raising an alarm because NGC is currently, (according to previous unchallenged press reports), unable to sell natural gas (at its contractually obligated prices) to the downstream manufacturing sector, unless at a substantial loss.“Can our nation afford to further subsidise downstream industries which already enjoy a wide range of confidential contract “incentives”?

If the difference in the price NGC must now pay and the price it must sell to downstream industries is vastly different, then either the beleaguered taxpayer will be forced to carry this additional burden or these industries must close.”FFOS said a number of gas-intensive manufacturers, which are dependent on a reliable competitive gas supply, would now be made to pay for gas at prices which are substantially higher than their US counterparts.The organisation said government should state how this was allowed to happen under the “watchful, brilliant and experienced Minister of Energy (Franklin Khan) and Prime Minister.”

“How could our ‘competent’ negotiation team agree to pay prices that are more than we’re contracted to sell downstream users and above the price which is obtained in the USA? What were the unexplained factors which justify agreeing to a whopping 64 per cent gas price increase?”FFOS said unless laws governing “contract transparency” and public oversight were not changed, “secret deals will continue to deprive our treasury and compromise the already shivering future of our contracting economy.”It said the TT Extractive Industries Transparency Institute had to expand its oversight beyond financial accountability to “aggressively advocate” for contract transparency.

“In other words, our nation needs to know what we earn in royalty tax and how that compares to the value earned by other mineral-rich nations for the equivalent volume of mineral extracted.”FFOS also cited the 2015, 2016 and 2017 Auditor General reports which “consistently complain that there is no regulatory oversight on how much minerals are being extracted and that royalties are therefore being calculated based on an “honour system”. “This revenue weakness continues nonetheless and the Auditor General’s printed statements year after year appear to be falling on an otherwise preoccupied and unconcerned public administrators.”