Khan: Gas hike not linked to refinery closure

YESTERDAY’S hike in the cost of super gasoline was not linked to the closure of Petrotrin and its refinery, said Energy Minister Franklin Khan. “We wanted to reduce the subsidy, we kept the price of diesel constant and decided to up the price of super...and that has nothing to do with the refinery.”

The money saved has been redistributed to social services and the social safety net to the most vulnerable, he said.

Asked about any taxis using super, Khan said they can convert to compressed natural gas (CNG) that costs $1 per litre equivalent. He said it is time for people to get serious about conversion to CNG and taking up these concessionary rates.

Newsday asked if enough CNG stations exist to lure drivers to convert? Admitting there is a challenge, Khan said nonetheless the CNG station network is being expanded as we speak, with a big station at the Couva Roundabout.

“We are trying to equip more and more stations with CNG capability and put down a CNG station in Tobago.” Asked about a $12,000 cost of a CNG conversion kit, Khan said, “If you are in the taxi business you pay back for that in six months. If you are a fairly long commuter, you pay it back in under a year. That’s as economical as you can get.”

Asked if he expects any fallout, he replied, “Any time prices go up, obviously people will respond in a particular way, some more understanding than others. But I think the context in which it was placed in the budget, I think it is difficult to say it is not justified.”

Saying it was “a good budget,” he foresaw a turnaround of the economy. He spoke of a steady gas supply, increased revenues from oil and gas companies and the Government’s ongoing negotiations with energy firms over transfer pricing, (that is, how prices are set for goods or services sold between two firms with a common owner, but often used as a way to reduce taxes paid.)