Home' Trinidad and Tobago Guardian : August 8th 2013 Contents AUGUST 2013 • WEEK TWO www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG5
T&T will not meet its August 28 deadline for validation
by the Extractive Industries Transparency International.
At the heart of the problem is a presidential pardon for
officers of the Inland Revenue Division to make available
income tax information that oil and gas companies have
paid to the Government.
Chairman of the local EITI Victor Hart explained that
T&T has already requested an extension to the end of Decem-
ber which will allow it to not only deal with the issue of the
presidential pardon, but also to have legislation put in the
place to allow the Board of Inland Revenue to make public
the tax information of oil and gas companies.
Under the law, officers of the BIR cannot make public
income tax information even with the written consent of
the companies. However, in an effort to ensure the Govern-
ment accounts for every cent paid to it by oil and gas com-
panies, the EITI is supposed to get the tax information from
the companies, the BIR and the Government and then rec-
oncile the figures to ensure money from the energy sector
is not being siphoned off by any government.
The Central Tenders Board recently issued a request for
proposals to 14 approved validation firms with respect to
the conduct of T&T s first validation of its EITI implemen-
tation. The tender will close on August 22 and an award of
a contract is projected in September.
Hart explained the EITI had already met with President
Anthony Carmona to inform him of the need for the pres-
idential pardon and are expected to meet again this week
to continue working on acquiring it.
Meanwhile, legislation has been drafted by an independent
counsel hired by the EITI and has been presented to the
Office of the Attorney General with a view to it being brought
to the Parliament at the earliest possible time.
He further explained that T&T s request for an extension
in no way suggested the country had done badly in its effort
to become EITI compliant. Hart pointed to other countries,
like Indonesia, which recently asked for an extension. He
said during a recent visit to T&T, the head of the EITI inter-
national secretariat, Jones Boberg, said he would recommend
approval of this country s application for an extension.
As a member of the EITI, the government of T&T is
required to publicly declare annually all revenues received
from companies engaged in the extractive industries (oil and
gas upstream activities, initially) and the companies, in turn,
will publicly declare sums paid to the GORTT. Any discrep-
ancies between the two reported figures will be subjected
to an independent audit to reconcile the differences and the
results published and widely disseminated.
Finance Minister Larry Howai said
he is considering raising the price
of super gasoline and diesel, but
admits he could face difficulty in
persuading the Cabinet to agree
to this move so close to the 2015 general elec-
In an interview following last week s pres-
entation of the results of the 2012 Ryder Scott
Natural Gas audit, Howai said, "Certainly, in my view, and all of this is subject to Cabinet
approval, in my view, we have to move and
continue that process of recalibrating the whole
issue of subsidies for the country, and that
includes everything, including fuel and other
areas of subsidy. But in terms of the pressure
to make the decision, because of our improved
fiscal position, we do have some freedom, but
I want to be frank and say with an election
in less than two years, we will have an uphill
climb in convincing the Cabinet of this since
close to an election one does not like to take
dramatic shifts in policy."
Howai said the country had to find inno-
vative ways of dealing with the whole issue
of subsidies, including the price of super gaso-
line and diesel. He said premium gasoline
would not have to increase and suggested that
at present, the fixed price of premium may
actually be higher than what the true market
price should be.
In the 2013 budget, Howai announced a 44
per cent increase in the price of premium,
which went from $4 a litre to $5.75.
The price of diesel at the pump is $1.50 per
litre while super is $2.70 per litre. The subsidy
the Government pays per litre for diesel if the
price is US$79 a barrel is $2.71 per litre while
its $1.83 per litre if the price is US$79 a barrel.
For the fiscal year, oil prices have averaged
above US$90 per barrel.
Energy Minister Kevin Ramnarine also
acknowledged the high price of crude oil,
which has been averaging over US$100 per
barrel for the three months was a double-
edged sword for T&T. Ramnarine said: "What
it does is result in an increase in revenue, but
also increases the burden of the subsidy which
the Government and the companies are pay-
Howai said the Government had approved
his billion-dollar plan to increase the use of
compressed natural gas as an alternative fuel
to super and diesel by motorists whose vehicles
consume significant fuel to turn to the cleaner
and cheaper alternative. He said the Govern-
ment was pursuing its CNG, starting with
"Where the focus will be is more on the
State enterprises, so you will have police vehi-
cles, a few buses have already started using
CNG, so we will accelerate that and we will
be monitoring to see how they operate and
then we will go to some of the other ministries,"
He said good progress was being made on
the economy and his 2013/14 would continue
its expansionary agenda as he tries to maintain
economic growth. Howai said he was confident
the economy will show growth on a year-on-
year basis when compared to 2011/12.
He said the projected $7 billion deficit would
not occur since for the first nine months of
the year, the economy had actually registered
a surplus of more than $300 million. He said:
"In my own reading of the first nine months
of this year, the data that I have, have us actu-
ally showing a budget surplus, mainly because
revenues are up and expenditure have been
relatively well controlled. So while we had
projected the deficit of several billion dollars
to the end of June, we actually have a surplus
for the first nine months."
The Minister of Finance said his approach
was to first deal with the big issues facing the
economy, like Clico and the Hindu Credit
Union, and now that those issues are almost
settled, the time had come to move to a posi-
tion of growth in the economy.
Finance Minister mulls price
increase of super gasoline, diesel
T&T requests December extension
to meet EITI deadline
Finance Minister Larry Howai
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