Opposition leader questions sale of NP stations: 'We will pay more at the pumps'

OPPOSITION Leader Kamla Persad-Bissessar has expressed concern that the Finance Minister’s budget announcement that Government will be selling and privatising NP gas stations could lead to the formation of a cartel and price-gouging.

She was giving the opposition leader's response to the budget in the House on Friday.

She argued that the privatisation of the company-owned sites and the deregulation of retail-fuel prices opened up the definite possibility of a cartel retail business in a vital sector.

“When the Government announces its selling price of fuel to retailers at the beginning of every month, one would expect that the Petroleum Dealers Association would suggest a retail selling price of the fuel.

"However, no retailer is mandated to use that suggested price and can easily form a cartel with other retailers to set a much higher price. This would mean that maxis and taxis would raise their fare prices. We will pay more at the pumps. This is a higher cost of living for everyone.”

She called on Government to ensure a price cap at the pump to protect citizens from price-gouging.

She also pointed out most of the NP gas stations are located in prime real-estate locations and questioned whether the land could be used for purposes other than  gas stations.

She said, contrary to what the Prime Minister and the Finance Minister stated, NP’s business model is not the distribution of fuel any more.

“What makes the National Petroleum Marketing Company profitable in today’s market’s economy is the franchise agreements with the petroleum dealers and or the retailers. NP obtains most of its profits under the current business model plan of the management and rental operations of the gas station network, which includes the convenience stores which are operated by the dealers.”

She said the dealer-owned stations and dealer-operated stations are the less profitable ones to NP. She added the management of service stations amounts to 70 per cent of NP’s businesses and most of its profits.

Persad-Bissessar said according to the official records at the National Petroleum Marketing Company, in TT there are 113 NP gas stations, of which 75  are company-owned and the other 38 owned by the dealers.

“It is these 75 stations that bring in the majority of profits for NP. By the Government selling these stations, they will have removed the profitability of NP as an organisation, which would inevitably lead to NP making a further loss.

"Is this PNM government signalling that in the same way that they closed Petrotrin, they are closing NP? Are they going to come and put more than 500 permanent employees and their families on the breadline as well as the thousands of citizens who are dependent NP contractors?”

She said government’s track record has shown its callous approach to labour relations.

“They will show little remorse in taking the food off the kitchen tables of these employees.”

She said the estimated value of the 75 service stations owned by the NP Marketing Company is approximately $1 billion, and they have an approximate value of  $15 million each.

“We in the Opposition will be looking very closely at the process of the sale of these stations. We are saying there must be no fire sale of state assets before the procurement legislation is operational.”

She also said that many, if not all, of the 75 station owners signed a new ten-year lease on the franchise arrangement recently, before the election. She questioned, therefore, if the current dealer is not able to purchase the station, whether NP must now pay off these dealers for their ten-year contracts.

“Is this part two of the gas station racket, PNM-style? Are we to have another Gene Miles?”

She was referring to the Gas Station Racket Enquiry of 1965 in which Miles featured as a star witness.