Imbert: No change in diesel price

FINANCE Minister Colm Imbert said there will be no further changes to the price of diesel fuel.

He made this statement yesterday at a luncheon hosted by the Trinidad Union Club at the Kapok Hotel in Port of Spain. Imbert will present the Mid-Year Review in Parliament next month. TT already pays world market prices for super and premium gasoline.

Imbert said government has not removed the subsidy on diesel because it would be "too much of a shock to the system to completely liberalise fuel prices." Goods vehicles and public transport vehicles such as buses and maxi taxis, use diesel fuel. The cost to subsidise diesel for this fiscal year may be about $500 million.

Imbert observed this was a "far cry" from a year when it cost $7 billion to subsidise diesel. In last year's budget, the price of diesel was increased from $2.30 to $3.41 per litre.

On other issues, he said government has made no decision to privatise any state enterprise at this time. Imbert said these companies employ a lot of people and there is a genuine fear of job losses should they be privatised. He boasted that several state enterprises' performance improved under the PNM's watch.

Citing Caribbean Airlines (CAL) as an example, Imbert said CAL was losing an average of $500 million annually under the People's Partnership (PP). Recently, he said CAL achieved an operating profit of $42 million for last year. "That to me is a significant achievement." He was confident CAL would record a profit after tax and soon be able to start paying dividends to the Treasury.

On Petrotrin's restructuring, Imbert said Heritage Petroleum reported an operating profit of $500 million in the first four months of this year. He was reasonably confident that Heritage would succeed in refinancing a US$850 million bond due in August.

Within the next year, Imbert said government will be seeking an upgrade in its credit rating "because we have solved the Petrotrin problem." Now that TT's fiscal position has been consolidated, Imbert said "We can start stimulating the economy with expenditure in the productive sector."

Over the next six months and next year, Government will be clearing off significant debts owed to suppliers and contractors and dealing with Value Added Tax (VAT) refunds. Imbert said the PNM inherited a situation where there were VAT refunds totalling approximately $5 billion.

A $1 billion reduction in VAT refunds between 2014 and 2015, Imbert said, caused VAT arrears to accumulate. Imbert said financing will be raised on the market to pay off these VAT refunds. He also identified manufacturing and construction as two sectors of the economy targeted for stimulation.

TT has over US$7 billion in foreign reserves and over US$6 billion in the Heritage and Stabilisation Fund. Reiterating there will be no devaluation of the TT dollar, Imbert explained these funds ably allow a defence of the exchange rate.