Stakeholders: Young, government must provide fiscal incentives to save energy industry

A heavy task lies ahead for the new Minister of Energy and Energy Industries, Stuart Young. Stakeholders on Thursday said Young must consider advising government to provide fiscal incentive to save the energy sector.

Young was appointed the post earlier this week after the sudden death of Franklin Khan on Saturday.

The energy sector, according to former energy minister Kevin Ramnarine, is in peril and re-evaluating the gas value chain was critical. In order to achieve this he said compromise by all parties involved, particularly the government would be a necessity for change to take place.

“The government may have to provide some kind of fiscal incentive to the upstream companies, and this should enable increased production and allow us to produce gas more competitively," he said on Thursday.

“They have to take a smaller piece of the pie to allow for the survival of the industry.”

Ramnarine predicted harder times ahead with price changes soon to come for ammonia and methanol, which would put more pressure on the sector.

“Once the prices for ammonia and methanol fall and the price of natural gas remain high, then we are going to have more plant closures again. A shortage of natural gas and pricing are driving the closures of plants. Government needs to address fiscal reform and contract negotiations to ensure competitiveness.”

The Couva/Point Lisas Chamber told Newsday on Thursday that while the energy industry was in a horrible state, it still had hope that it could be revived.

President Ramchand Rajbal said Young needed to look at making provisions to ensure there was reasonable pricing of gas in the upstream sector.

“Immediately, the issue that is confronting the industry is the pricing of gas and its shortage. We would like the minister to address this lingering issue as soon as possible.

“There needs to be government intervention with the up-streamers and to work out an affordable price arrangement with the National Gas Company (NGC) so in return the downstream companies will be able to survive.”

Rajbal was hopeful that the minister would meet with the chamber soon to discuss this matter, and others as well, to hear their recommendation for government-issued bonds to assist the energy industry.

“There should be some sort of concessions for the upstream industries so that the gas can be purchased at a cheaper rate. Maybe there could be some bond that they could work towards issuing.”

He added that the covid19 pandemic has placed a strain on much of the economy and urged government to cut back on spending on what he described as “vanity” projects.

“There are many vanity projects such as construction that is not necessary at this time. This can be put on hold. There should be more emphasis on the survival of the energy sector and by extension our people.

“Businesses cannot get foreign exchange to conduct what is supposed to be simple transactions like purchasing food. Some shipping companies are only accepting US currency, and all of this has put a significant spin on how people are going to survive.”

Rajbal lamented that the closure of plants in the industry have had a significant impact on the country, and more so on the communities surrounding the Point Lisas Industrial Estate.

“More and more people are becoming unemployed. And with this lockdown it is just compounding the hardships already being faced.”

Rajbal called on the covid19 Road to Recovery Committee, appointed by the Prime Minister last year, to put forward intelligent solutions to save the energy sector because TT remained a heavily oil and gas-dependent economy.