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Khan willing to talk to Petroleum dealers

Published: 
Tuesday, October 2, 2018
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Motorists at the Unipet Gas Station in San Fernando. Photo by:RISHI RAGOONATH

Energy Minister Franklin Khan has committed to meeting with petroleum dealers who have complained the money they earn from fuel sold at the pump has virtually been wiped out by the one-dollar increase in the price of Super gasoline announced in yesterday's 2018-2019 Budget.

Khan made the commitment during a panel discussion on CNC3 last night in response to concerns raised by Unipet chairman Dr Afraz Ali.

Ali told the panel the increase in the price of Super from $3.97 to $4.97 "affects us very seriously" as 43 per cent of their revenue comes from the sale of Super fuel.

He said the change in price "means we are paying 13 per cent more in levies. That effectively wipes out the margin that was given to us in the last review if the budget, so it nullifies it. We're back to square one."

Ali said every wholesaler will be affected, but so would retailers.

He said 60 per cent of their revenue comes from the sale of Super but the levy they pay now is equivalent to 20 per cent, so they will be in an even worse position with respect to what happens with their bottom line.

Khan said the decision to increase Super was "a balanced position and one that was well thought out."

He said removal of the subsidy was a "fact of life."

He said the Government maintained the subsidy on diesel because of the impact it would have had on the cost of public transportation and goods vehicles.

But Ali noted the increase in the price of Super would also make it difficult for some businesses to continue.

Khan admitted that if you have a "fixed margin and your prices go up, the margins remain fixed and you have to pay Green Fund and business levy on your gross revenue, it will impact on your bottom line."

He committed to "sit down and discuss" the issue but gave no indication of how soon the discussions will take place.

Petroleum dealers currently get 17 cents for every litre of super gasoline sold and 14 cents on a litre of diesel.

Panellist David Abdulah forecast that when the country starts importing fuel the price of diesel will also increase.

"It will be sooner rather than later," Abdulah said.

While the panel conceded that removal of the fuel subsidy was expected, they argued that it should have been done in a more open and transparent manner.

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