Imbert: Government will act against fuel cartels, price-gouging

FINANCE Minister Colm Imbert has said no cartel activity or price gouging will be allowed in the domestic liquid petroleum products sector as steps are taken to liberalise it.

Imbert made this point as he opened debate on the Finance Bill in the Senate on Tuesday.

He said, "What we are doing is creating a transparent mechanism where the ex-refinery price...that is to say...the price of motor fuels sold by a refinery that would be shipping fuel to Trinidad and Tobago, will be known and published.

"The terminal price, which is the price that Paria (Fuel Trading Company Ltd) would charge for the fuel after adding in its handling costs and other expenses...will be known and published."

The wholesale price, which is the price at which the fuel is sold to the dealers, he said, would be known and published.

Imbert added, "Then the dealers would be allowed to put their own margin, to arrive at the final price at the pump."

But he warned, "If the Government determines that dealers are engaging in price-gouging...then appropriate modifications would be made to the legislation, to put a cap on the margin that dealers will be allowed to charge."

At present the issue is being left to competition, he said, "But if we discover cartel behaviour, collusion or price-gouging, the Government will not hesitate to amend the legislation appropriately to protect citizens."

Imbert said the liberalisation will not be implemented immediately because of a commencement provision in the bill.

"We have a lot of things to put in place."

He said the legislation allows the energy minister to "prescribe a wholesale price for any particular fuel that is lower than the world market price (of crude oil), which allows us to continue a form of subsidy for a period, as long as it is required,"

At this point, he said, the Government intends "to continue to subsidise diesel (fuel) by establishing a wholesale price that would be lower than the actual world market price of diesel, until the situation improves in the country, in terms of the (covid19) pandemic and the economic situation."

He said the legislation requires someone conducting marketing business to pay a fuel levy monthly to the Minister of Energy and Energy Industries.

"Might I say,,,the way that this would work is that once the price of oil is over US$65 (per barrel), the fuel levy would be zero.

"That is the price at which current prices at the pump were predicated. So the price of super and premium gasoline are based on an assumed, denotional oil price of US$65 (per barrel)."

This meant the prices at the pump at this time would be the yardstick for prices going forward in terms of gasoline.

The current prices for premium gasoline, super gasoline and diesel at the pump are $5.75, $4.97 and $3.41 per litre respectively.