Kamla: Paria in ‘serious trouble’
The supply of fuel to this country is under threat as Paria Fuel Trading Ltd is facing a monthly shortfall of US$20 million to purchase fuel.
Opposition Leader Kamla Persad-Bissessar disclosed this last night at the United National Congress (UNC) Monday Night Forum in Fyzabad.
Persad-Bissessar read from a letter from Trinidad Petroleum Company Ltd chairman Wilfred Espinet, dated June 7, to Energy Minister Franklin Khan. She said the letter was dropped in her mailbox.
Paria Fuel Trading Ltd, she said, is in serious trouble just eight months after being in operation.
She noted that Espinet’s letter gives an update on the Petrotrin transformation process and lists a number of ‘immediate risks’ which include ‘an ongoing shortfall of US$20 million per month to purchase refined fuels to ensure supply to the country–this is a structural problem that is going to result in a shortage of fuel unless corrected’.
‘That is a very serious issue. The supply of fuel to the country is under threat and I didn’t say so. The chairman of Trinidad Petroleum Holdings, Wilfred Espinet, said so. What is that US$20 million shortfall about?’ asked Persad- Bissessar.
She questioned whether the company is ‘haemorrhaging money’ and whether the cost of fuel will increase at the pumps.
‘Whatever it means, it is clear as day that Paria Fuel Trading, the company with the sole responsibility for importing this country’s fuels–super, diesel, premium, kerosene and jet fuel–is in big trouble,’ said Persad-Bissessar.
She said the decision to close down Petrotrin will be the biggest economic debacle in the history of this country.
Persad-Bissessar noted that the letter goes on to say another immediate risk is ‘The failure to implement ex-terminal pricing for imported fuel, despite the company and the MEEI (Ministry of Energy) having implemented a formula since November 2018’.
She said this is why the Government recently rushed a piece of legislation to implement this formula.
‘That was the amendment to the Petroleum Act and the Petroleum Production Subsidy and Levy Act. However, the chairman is saying to the Minister of Energy that this should have been done since last year when Petrotrin was shut-down and we started to import fuel. That must be the height of incompetence on the part of the smiling Franklin Khan as Minister of Energy,’ said Persad- Bissessar.
She read the other listed risks: ‘The inability to secure two letters from the Ministry of Energy and the BIR (Board of Inland Revenue) to close the 2018 year-end audit and finalise long-term financing. Requests for both these letters have been pursued daily for several months.’
Persad-Bissessar said this means that Petrotrin cannot publish financials for 2018 because of outstanding issues regarding royalty payments to the Ministry of Energy and outstanding issues regarding taxes owed to the BIR.
She said this speaks to ‘massive incompetence’ at the Energy Ministry, as well as the Finance Ministry and at Trinidad Petroleum Holdings.
The former prime minister added that next month Petrotrin has to pay US$850 million to bondholders it owes for a bond taken out in 2009 by the then Malcolm Jones People’s National Movement (PNM)-appointed board of Petrotrin.
She said this payment cannot be made so they went to the bondholders and asked them to refinance the bond to 2026 at 9.75 per cent interest.
She said although the offer was so good, almost half of the bondholders refused the offer and the result is they have had to borrow the remainder of the money to make the US$850 million payment. She said bondholders were so disinterested that the deadline for them to signal their intention to refinance was extended on three occasions.
Persad-Bissessar questioned what will be the overall cost of refinancing this debt.
‘It seems the Petrotrin candle is costing more than the funeral. When you consider the loss of production, the loss of revenue, the loss of sales of refined products and the cost to settle with workers, the closure of Petrotrin is a debacle because it was not properly thought out but done with spite, malice and contempt,’ said Persad-Bissessar.
