The cost of kerosene and liquefied petroleum gas (LPG) will remain subsidised, but other fuel prices – premium, super and diesel – will be adjusted in a move toward fuel liberalisation.
Finance Minister Colm Imbert said in Parliament in the 2021/2022 budget presentation on Monday afternoon Government has created a credible and reliable pricing system within the fuels market.
He explained that the Ministry of Energy and Energy Industries will have oversight of the pricing structure, ensuring retailers and dealers operate within the price ceiling.
“The Ministry of Energy and Energy Industries (will) post the market-based price of premium gasoline, super gasoline and diesel on the first day of each month, except for the price of kerosene and LPG, which will remain under the subsidy mechanism.
“The government (is) setting a retail margin ceiling for each petroleum product to minimise price fluctuations and to protect the end-consumers of premium gasoline, super gasoline and diesel.”
He said government would keep wholesale margins fixed for all liquid petroleum products by applying an appropriate but reasonable tax to compensate for the fuel surplus which is generated on the sale of gasoline when oil prices are depressed.
Imbert said the move, which was put forward a year ago, has been agreed upon and the design of its implementation was being worked on.
“Since that time the legislative amendments to the Petroleum Act and the Petroleum Production, Levy and Subsidy Act required to implement the liberalisation of the fuels market were finalised in the Finance Act 2021. Legislation was assented to in July 2021.
“We are now completing the design of the infrastructure within which the commencement of the liberalisation of fuel prices could be initiated, with due regard to the impact of fuel prices on the most vulnerable.”
Petroleum Dealers Association (PDA) president Robin Narayansingh told Newsday they were happy that the government was finally fulfilling its promise to the dealers.
He said the matter has been pending for over a year, and with legislation passed and the remit handed over to the Energy Ministry, negotiations can now start with the dealers and retailers.
“We are also happy that he made an effort to alleviate the fears of people who cannot afford the fuel, in the issuance of cash cards, so that they can get a rebate. I found it to be thoughtful and very nice of him to do something like that to level the playing field so that everybody can participate in the economy and what the country has to offer.”
Imbert had said: “A fuel cash card will be made available to vulnerable groups to offset the cost of increases in the price of motor fuels. This cash card programme will be administered by the Ministry of Public Utilities.”