MSJ: Billions in TT energy $$ has been 'ripped off'

Political Leader of the Movement for Social Justice (MSJ) David Abdulah said he is at a loss to understand how government shut down Petrotrin for its inability to pay some $3 billion in taxes, but has done nothing about the loss of approximately $18 billion in revenue from LNG owing to transfer pricing.

He was commenting on the report of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) which showed for the period 2010 to 2018 TT lost approximately $18 billion in revenue with respect to transfer of pricing of natural gas and LNG.

The information is contained in ECLAC’s latest publication “Navigating transfer pricing risk in the oil and gas sector. Essential elements of a policy framework for TT and Guyana.”

It spoke of TT’s current arrangement, which restricted it from fetching higher prices in a fluctuating market even when natural gas prices were high as was the case over 2010 to 2014. ECLAC concluded that in the period, revenue collections by Government could have been five times higher.

Addressing a MSJ news conference on Sunday, Abdulah said this is a point the MSJ has been driving home for years.

“It is not new. The MSJ spoke of transfer of pricing by energy companies, BP, Shell, Repsol, BHP with respect to natural gas and LNG but we were not taken seriously.

“The fact is that this country has been ripped off by billions of dollars by the mechanism of transfer of pricing. We have been called on the Government on many occasions to deal with transfer of pricing but the ECLAC publishes a report and the statement gets big headlines.”

He recalled Finance Minister Colm Imbert in several budget speeches speaking of the need for Government to get policies to deal with transfer of pricing mechanism and was getting advice from the IMF to deal with it.

"So he himself spoke about it, but what has he done? Nothing. And yet they closed down Petrotrin when Petrotrin never received a cent, not a single cent in subsidy from the Government.

“Not a single cent was put in from taxpayers into Petrotrin.”

As a member of the Lashley Committee which was appointed to review Petrotrin, Abdulah explained that committee’s report on Petrotrin up to June 2017 was owing taxes which it could not pay.

He said there were differing figures from the Ministry of Finance which put the taxes as $3 billion, while Petrotrin said the amount was $1.3 billion.

“Split it down the middle, Petrotrin probably owed about $2 billion. So you close down Petrotrin because it had not paid $3 billion in taxes. It never received a cent in Government subsidy, was paying all of its debts, was contributing immensely to the economy by way of employing workers, earning foreign exchange, providing fuel on the domestic market, subsidising LNG or cooking gas at no cost to the taxpayer.

“All of that Petrotrin was doing, supporting other businesses in the south that were providing goods and services to Petrotrin.

“But you closed down Petrotrin maybe because it was owing $3 billion in taxes, but you would not do a damn thing about Shell, BP, Repsol and others who would have ripped us off $18 billion. That is what this government is about," he contended.