PM: Government may cap fuel subsidy at $1b

THE Prime Minister said Cabinet might cap the government's subsidy to the price at the pump paid by drivers to $1 billion, Dr Rowley told Monday's briefing at the Diplomatic Centre, St Ann's.

He pointed out that the subsidy was still in place, despite claims by detractors. On the subsidy of LPG sold, he dared listeners to phone up relatives in other Caribbean countries to see what they were paying for a tankful of such cooking gas.

If the world market price goes up so as to exceed this $1 billion cap, he said, the consumer will have to pay the difference.

Rowley said Finance Minister Colm Imbert would address the nation on the country's economic situation in early September.

He welcomed inflation at five per cent, lower than US at nine per cent and European countries at seven-ten per cent.

The PM again warned the population not to take for granted the current windfall in revenues which was caused by world events such as Russia's invasion of Ukraine.

Regarding ongoing wage negotiations, he urged the labour movement to return to the National Tripartite Advisory Committee (NTAC). He added that legislating NTAC's existence and operation would not be feasible.

Rowley considered how to allocate the extra $8.14 billion in energy revenues recently earned by TT.

Mulling the Government recent allocation of $2.6 billion to adjust the national budget, he said if this sum was subtracted from the $8.14 billion in extra energy revenues, the remaining sum would be $5.5 billion. Rowley said the Government's latest offer of a four per cent wage to public servants alone would cost a lump sum of $2.4 billion in back pay plus an extra yearly commitment of $490 million. If the pay-hike was extended to all public sector workers, it would cost a lump sum of $4 billion in back pay, with a yearly increase in the wage bill by $800 million.

The PM asked if the country should commit to these wage-hikes when it was likely the current high energy revenues would prove to be just temporary.

Rowley said the US Government had recently acted to successfully force down the gasoline price to US$4 per gallon, which he said had pushed down crude oil prices. He said those prices could fall further.

He mulled a scenario of a ten per cent wage hike, which he warned could push back pay owed to public servants up to $5.8 billion plus a recurrent cost $1.1 billion per year. If this rise was applied to all public sector workers, the back pay owed would be $11.6 billion and the annual increase in the wage bill would be $2.2 billion, Rowley said.

He then remarked that labour leaders were seeking an overall 20 per cent hike, which he said the people of TT could not afford at the current levels of energy earnings.

Otherwise he said Guyanese President Irfaan Ali will visit TT on August 18, while Jamaican Prime Minister Andrew Holness will visit for TT's 60th independence celebration (with Independence Day falling on August 31.)