There will be no disruption of supply – Fuel suppliers

The government has given provisional approval for the waiver of the Common External Tariff (CET) to the two fuel distribution companies in St Vincent and the Grenadines (SVG).

Prime Minister Dr Ralph Gonsalves, while speaking in Parliament yesterday, said that the waiver will permit Sol and Rubis to purchase fuel outside of the Caribbean Community (CARICOM) and avoid the 10 per cent tax.

This decision comes one week after it was announced that Petrotrin, the petroleum company in Trinidad and Tobago, will shut down its refinery and retrench thousands of its workers.

“Of course, we informed the Secretary General of CARICOM that there would be a formal application, but that application will normally take between two to three weeks to be processed, but countries can’t wait on that period of time and certainly not in the case of St Vincent and the Grenadines where these purchasers don’t have storage capacity for beyond a three week period or there about so that it’s a very important decision which was taken Cabinet,” the prime minister said.

Gonsalves added that Trinidad and Tobago had agreed to the CET waiver as it relates to the fuel coming from Venezuela under the PetroCaribe agreement.

And he described the recent waiver as an extension of that principle, given the current situation.

The prime minister, who also holds responsibility for energy, said that he has spoken with the local managers of Sol and Rubis and he has been assured that there will be no disruption of supply.

“They were very happy to hear about the provisional waiver of the Common External Tariff,” he said. “They’re going to clearly import fuel from other places; Bahamas, St Croix, Curacao, the United States of America. Of course, places like Antigua which have storage capacity, they bring in from the United States of America and Sol for instance is associated with that storage facility.”
Gonsalves also said that providing the waiver of the CET will help to avoid the increase of fuel prices.

“I’ve raised the matters…with the managers locally. One is pretty sure that [it is] unlikely that there would be any increase in price as a consequence of going elsewhere. For instance, the transportation costs,” he said. “The other one wasn’t so sure. But we have a formula for the buildout and we’ll apply that and keep the community, the country informed.”

In June, Ambassador Francisco M Perez Santana, the head of the mission at the Embassy of the Bolivarian Republic of Venezuela in SVG, told SEARCHLIGHT that financial sanctions imposed on Venezuela by the United States of America were interfering with the country’s access to the international financial sector.

As such, one of the negative impacts on Venezuela’s allies, including SVG, was that shipments of fuel from PetroCaribe were being delayed because Venezuela was unable to pay shipping costs.

Gonsalves, in Parliament yesterday, said that he gave instructions to PetroCaribe officials to make sure that there was stored fuel at the Hugo Chavez Fuel and Distribution Plant in Lowmans
Leeward, so as to ensure energy security.

“That storage facility provides roughly three months’ supply. So, I want to assure this House that there ought not to be any disruption in respect of supply as a consequence of the closure of Petrotrin,” the energy minister said. “As Petrotrin works itself out, and all the details are known. Maybe again they will be buying from Petrotrin because there will be different arrangements but I think producers of goods and services in the country, normal commuters, would have been concerned about this matter.”

Gonsalves said that Petrotrin refined approximately 75 per cent of the fuel which is refined in CARICOM. There are also refineries in Jamaica (Petrojam) and in Suriname.

Keith Rowley, the prime minister of Trinidad and Tobago, in a recent report said that the decision to shut down Petrotrin was because of the company’s current debt situation.