Budget snippet: Fuel subsidy capped at $1b

As expected, Finance Minister Colm Imbert announced that the fuel subsidy will be capped at $1 billion per year.

He made the announcement during the reading of the budget on Monday.

Imbert said the fuel price is affected by the market price of oil, shipping, handling, storage and other market prices. He added that countries like Barbados have fuel prices three times as high as TT’s.

“Diesel is sold at $4 Barbados, which is equivalent to TT$13.60,” Imbert said. “Unlike Trinidad and Tobago, fuel is a revenue-earner in Barbados, because it taxes fuel.”

In comparison, Imbert said TT subsidises half the cost of fuel. He said with fuel at US$90 a barrel, the subsidy would cost the country about TT$1.9 billion.

“We are firm in our view that this level of expenditure on fuel is not productive, and that taxpayers' money...can be better spent elsewhere.”

He said the difference in revenue would be better spent in social grants, where $5.4 billion is spent per year, food support, on which $175 million is utilised, disability grants at $630 million, and social assistance grants, which cost $355 million.