Imbert rejects refinery, fuel price claims

The content originally appeared on: Trinidad and Tobago Newsday

Colm Imbert –

FINANCE Minister Colm Imbert rejected claims from the Opposition UNC that the closure of former state oil company Petrotrin’s Pointe-a-Pierre refinery in 2018, has resulted in the population having to pay higher fuel prices.

Imbert made this comment in the House of Representatives on Friday, as he announced an increase in fuel prices from April 19.

Describing the claims made by the UNC and other commentators as a fallacy, he said, ” In this context, it is necessary to remind commentators that in 2014, when the refinery was in full operation, the fuel subsidy liability to the government in that year was $7 billion.”

Imbert added, “That is what it cost taxpayers of this country to maintain fuel prices at subsidized levels in 2014.”

Before its closure four years ago, he continued, the refinery’s daily throughout of oil was approximately 140,000 barrels of oil per day.

“This meant that every day that the refinery operated, it was required to purchase 100,000 barrels of imported oil at world market prices, which at today’s prices would require foreign exchange of US$10 million per day to purchase oil.”

Imbert said a team appointed in 2017 to review Petrotrin’s operations and make recommendations for its restructuring, estimated that between 2012 and 2016, the refinery lost up to US$15 on each barrel of oil that it processed, with consistently negative refinery margins.

“Using an average loss of US$8 per barrel of oil processed during this period, this meant that the refinery lost over U$1 million per day in its operations.”

He opined that if the refinery was still operating “not only would there be a huge billion-dollar fuel subsidy liability to contend with, but there would be leakage of US$1 million in foreign exchange per day and a requirement for Petrotrin to find US$10 million a day to purchase oil.”

Imbert added, “This is what we evaded by the closure of the refining business through the restructuring of Petrotrin. These are undisputable facts.”

He said Heritage Petroleum is now selling its oil at premium prices and earning valuable foreign exchange.

Imbert hoped ” these facts correct the misconceptions being propagated in the public domain about this issue by self-interested or deliberately misinformed individuals.”