National Petroleum Marketing Company (NP) chairman Sahid Hosein yesterday said the company never intended to raise the price of cooking gas.
Hosein made the comment as he came udner more fire after reports that there was an intention by the State company to increase the cost of Liquefied Petroleum Gas (LPG) and to allow retailers to set their own prices.
In a telephone interview yesterday, Hosein said the board’s intention was simply to supply more of the country with cooking gas.
“The intent was never to raise the price, we were allowing them to go where the market was. We were bringing in new entrants to sell at what the market was selling. It has nothing to do with raising the price, this is the price that already exists,” Hosein said.
He said not everyone pays $21 for LPG, as some, depending on the location, pay up to $30 in areas like Blanchisseuse and Toco.
“And I know why, because in those areas it costs a lot for the dealers to get the gas in the first place,” he said.
He said the board took the decision after management asked it to examine the issue.
“The note came to the board because the dealers were engaging the management to be allowed to sell at what the market sold at. We went ahead and we said yes. What is incredulous is that the same people we said yes to, ran to the press and said NP decided to raise the price of LPG,” Hosein said.
Hosein said it was management who met with the retailers and listened to their complaints before bringing the issue to the board.
“The board does not get up on Monday morning and say we are going to convene and we going to talk. The management brings matters to the attention of the board, the board deliberates and they either accept or reject,” he said.
“The board does not go and implement those decisions.”
Hosein said decisions made by the board are also not implemented immediately.
“There is a process and soon after we assent to a decision, depending on what it is, it is implemented. It is unfortunate that the time of implementation was just the day after the Minister (of Finance) said that the price is still $21 and this was the official price,” he said.
Hosein then explained how the note came to the board.
“We have 118 service stations in the network, strategically located across the country, so it means if we sell LPG through that network, we can touch the whole of the country,” he said.
“The dealers were not selling it simply because the margins were too small and the cost for them selling it is not something they were prepared to bear.”
He said a dealer makes roughly $1.80 per tank while a convenience store makes $0.12 per tank because of the commercial arrangements in place.
A single tank costs $258.75.
“If one tank is lost, you have to pay that $258.75. So you have to sell about 2,000 tanks, or the same tank over and over 2,000 times just to make back the cost of replacing one tank. I don’t have to tell you that not making sense,” Hosein said.
“We produce the LPG, the gas station is ours, they belong to our network, they should be selling the gas,” he maintained.
He said that there was a reason that NP was under attack.
“Over the years, the PDA (Petroleum Dealers Association) has been bashing NP and calling for the removal of NP and saying it should be privatised but last year, when certain stations and networks shut down, it was NP that stayed on and people did not even realise there was a shutdown,” he said, referring to the December 2019 shutdown by Unipet after Paria Fuel refused to supply fuel over a non-payment of fees.
“You understand why they don’t want NP in the landscape,” Hosein said.
“NP is the one that helps to stabilise the prices and ensure that the industry doesn’t get out of whack. NP operates on very, very thin margins but because we carry costs that they don’t carry, it’s a lot more onerous on us.”
Hosein said NP has to transport as much as 70 per cent of its fuel from Paria’s site to its own storage space in Sea Lots. He said this was done at “tremendous cost” which NP does not pass on to consumers.
“If NP is not in the picture, who is going to carry that cost? Do you think the private sector is going to be prepared to carry that cost?”
He said the additional cost will find its way to the consumer.
“So that is why NP is a humbug in the landscape.”
Yesterday, Oilfields Workers ‘Trade Union (OWTU) president general Ancel Roget called for Hosein to step down over the issue.
While Hosein said he was not afraid to resign or be replaced, he felt the matter was now being blown out of proportion.
“As far as I am concerned, it really is not an issue because some people understand what the issue is and others quite deliberately misrepresented what the position is because they have an agenda,” Hosein said.
“This call about resigning, that holds no fears for me. I will be a private citizen, I have a life to live.”
He said the entire board felt the same way.
“If we have to resign, so what? If we are replaced, so what? This is not about ‘office’, this is about service and helping to do something positive in the interest of the people,” he said.