Fuel prices will rise on April 19 – PRESSURE AT THE PUMP

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Drivers refuel their vehicles at the NP gas station near Wrightson Road in Port of Spain on Friday, the same day Finance Minister Colm Imbert announced an increase in the price of diesel, premium gasoline and petrol. super gas, starting April 19. PHOTO BY ANGELO MARCELLE –

From April 19 – the day after Easter Monday – there will be an increase in fuel prices, Finance Minister Colm Imbert announced in the House of Representatives on Friday.

Current prices per liter for premium gasoline, premium gasoline and diesel are $5.75, $4.97 and $3.41 respectively.

This is the fourth fuel price adjustment implemented since the PNM returned to power in September 2015.

On April 19, the price of premium gasoline and premium gasoline will be adjusted by $1 per liter to $6.75 and $5.97, respectively, while the price of diesel will be adjusted by $0.50 at $3.91 per litre. The price of kerosene will be adjusted from $1.50 to $3.50 per litre.

The price of liquefied petroleum gas (LPG) remains set at $21 for a 20-pound cooking gas cylinder for domestic customers. The Department of Energy will consider what the appropriate price of LPG will be for commercial customers.

These decisions were taken Thursday in Cabinet.

Imbert said the government had done its best to protect citizens from the full impact that rising fuel prices would have on the cost of goods and services.

“The government is aware of the effect of a fuel price increase on consumers, notwithstanding that a fuel subsidy is a regressive measure,” he told the House.

He reminded MPs that when presenting the 2022 budget last October, the government indicated that there would be liberalization of domestic fuel prices.

Imbert said that in October, oil prices were nowhere expected to rise more than 60% in five months. This was attributed to Russia’s invasion of Ukraine on February 25.

When finalizing the 2022 budget last September, Imbert recalled that the price of oil was slightly above $70 a barrel. Two months later, it fell to US$65 a barrel. The budget was indexed to an oil price of US$65 per barrel and a natural gas price of US$3.75 per mmbtu.

Concerns about oil prices were also influenced by climatic and global economic factors that predated the invasion of Ukraine, he pointed out.

Imbert said a negative effect of low oil production levels and high oil prices is an increase in the fuel subsidy, which must be paid from tax revenue. Fuel prices are influenced by oil prices. LPG prices are influenced by natural gas prices.

Colm Imbert, Minister of Finance. FILE PICTURE –

“At current commodity prices, contrary to persistent misinformation in some quarters, all of these fuels are still heavily subsidized, even though we have already reduced levels somewhat, in earlier times,” Imbert said.

He said the highest subsidies were for LPG and kerosene, insisting that “there remain substantial subsidies on fuels used in transport”.

In the absence of the subsidy, he said, “premium gasoline retail prices are expected to range from $6.18 per liter at an oil price of $80 per barrel to $7.58 per liter at an oil price of $100 a barrel”.

Unsubsidized diesel prices, he said, would range from $5.35 a liter at an oil price of $80 a barrel to $6.58 a liter at an oil price of $100 a barrel.

To keep fuel prices at current levels, Imbert said “requires a substantial amount of government subsidies.”

Imbert estimated that the money needed to subsidize the billion liters of fuel used each year in TT “ranges from $922 million at an oil price of $80 a barrel to $1.94 billion at an oil price $100 a barrel.

He said the government will have to pay about $1.69 billion in tax revenue to maintain the fuel subsidy. “This level of subsidy is unbudgeted and unsustainable,” he said.

Although a fuel subsidy is a regressive measure, the government was also aware of the effect that rising fuel prices would have on consumers.

“As a result, the government is of the view that the responsibility for any fuel price adjustment should be shared more or less equally. The public should be asked to pay half the cost of the fuel market price increase, while the government absorbs the other half.”

Imbert said the partial adjustment would be “sufficient to allow an equal distribution of costs”.

These price adjustments will still require a government subsidy of about $840 million this year.

To encourage motorists to save fuel and mitigate the effect of rising fuel prices on citizens, Imbert said by mid-May, arrangements will be made “to allow exemption from taxes and customs duties on imported hybrid cars of appropriate size, both new and used.”

These concessions will not be available to owners or importers of high-end luxury hybrid cars. Further details will be provided later.

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