ONE week after a fuel impasse between independent fuel retailer and state-owned provider Paria Fuel Trading Company Ltd left drivers frustrated in long lines at gas stations across the country, the two entities have reached an agreement.
A statement issued late Monday by Paria said both parties signed a settlement agreement that would allow the supplier to immediately resume the supply of fuel to Unipet.
Paria said Unipet agreed to pay all outstanding debts.
Paria also said the supply of fuel to Unipet resumed at 5 pm on Monday. Unipet also agreed to withdraw its injunction application and judicial review claim it filed on Friday.
Hours earlier, the judge assigned Unipet's application was told both parties were in “encouraging” discussions and was is likely that the fuel impasse will be resolved by Tuesday.
In its application, Unipet sought to challenge Paria’s decision to cut its fuel supply last week.
Unipet’s lead attorney, Seenath Jairam, SC, told Justice Avason Quinlan-Williams the discussions were “encouraging,” based on the last telephone call he had with his clients. He said over the weekend the parties spent some time narrowing down the areas of dispute and he was confident, based on the feedback he has received, the issues will be resolved.
However, Jairam said in the unlikely event they are not, Unipet was ready to proceed with its application.
Appearing for Paria was attorney Rishi Dass, while attorney Gregory Armorer announced his appearance as a watching brief for the National Petroleum Marketing Company (NP.)
Quinlan-Williams adjourned the matter to Wednesday for the parties to report back to her on the discussions and said she would allow 24 hours for negotiations before she gives directions, if it becomes necessary.
Last Tuesday, Paria announced its decision to cut Unipet’s fuel supply because the company had failed to renegotiate a supply agreement since April. It also said Unipet defaulted on payments owed for September and October deliveries.
In the wake of the supply squeeze, 25 Unipet gas stations across the country were closed after its supplies were exhausted.
Paria’s statement last week Tuesday said, “Paria has had challenges receiving payment from Unipet in accordance with the agreed payment schedule; this failure to pay monies when due has the potential to affect Paria’s ability to procure fuel from its suppliers. Paria is willing to continue discussions with Unipet to achieve a solution that is both safe and in the best interest of both companies and which minimises any disruption of supply to the local market.”
"Unipet’s chief executive Dexter Riley, in documents filed in support of the company’s application, said the solution to the problem was for Unipet to have a licence to import fuel.
"The company has also claimed Paria was using its monopoly in the petroleum marketing sector to inflict more punishment and hardship on it, although Government was fully aware it has been tardy in paying fuel subsidies.
"Unipet caters to approximately 30 per cent of the public’s fuel consumption while state-owned National Petroleum (NP) serves 70 per cent.
Unipet also supplies petroleum products to oil and gas multinationals exploring in TT.
Government currently pays a subsidy as part of the price-fixing regime which enables Unipet to sell fuel at the fixed price although it pays for fuel supplied to it at higher prices. As at October, the State owed Unipet $72,444,092.60 in outstanding subsidies.
The company has said the payment of the fuel subsidy was critical to a marketing entity’s ability to pay for fuel supplied to it.