Home / View Point / Guest Columns / Criticism vs Critique Pt 2: Hassanali takes a stab at the fuel subsidy debate

Criticism vs Critique Pt 2: Hassanali takes a stab at the fuel subsidy debate

I am no hypocrite. So before someone, having read what I have so far written, attempts to stick that label on me for not practising what I preach, let me have a stab at elevating the fuel subsidy debate.

I totally agree with the sentiment that the subsidy in its current form is a luxury we can no longer afford and which unfairly benefits those who don’t need it more than those who do.

Photo: Minister of Finance Colm Imbert.
(Courtesy Power102)

But given how direct is its link to cost of living indices in our society, the far more obvious play to me would be to seek to not scrap it completely but to so adapt it that the negative impacts are minimised.

Moreover, for the Finance Minister to say that the money saved “can be used” for other initiatives which aid the poor and underprivileged without demonstrating how exactly he intends to do so is unhelpful; he simply has not earned that level of trust. To me, if you are going to increase the cost of transportation for motorists, it makes more sense to reinvest most of the money saved in improving the public transportation product as well as in enhancing pedestrian mobility so that ordinary people have real options when it comes to moving around safely and easily.

With that in mind, then, here are some recommendations for implementation in the short-to-medium term:

1.Leave the fuel subsidy in place for registered taxi and maxi-taxi drivers: Maybe there can be some sort of smart card—the Unipet model?—they carry that automatically applies the discounted rate. The effects of this are two-fold.

Firstly, it forestalls the automatic fare increase that follows every fuel price increase. Secondly, it provides ‘PH’ drivers—currently a necessary ‘evil’ for many as a transport option—a real incentive to become registered ‘H’ drivers.

Photo: A commuter waits for a maxi taxi on the Bus Route in D’Abadie.
(Courtesy Sean Morrison/Wired868)

2. Put in place a similar system for companies with registered goods vehicles that are responsible for the transportation of food, materials, etc: Ideally, I would like this system to apply all the way down to small contractors and other similar sole proprietorships which use their own private diesel pickups and vans for their work. But there is a point at which the smart card system I propose is simply not feasible because it gets too easy to abuse. Maybe we need a refinement involving tax credits or something of that sort.

3. Increase the number of CNG pumps nationwide but especially along maxi-taxi routes: When availability is no longer an issue, make the switch compulsory. Or make it particularly attractive by revoking the Smart Card.

4. Give serious consideration to the implementation of BRT: The PNM seriously needs to let go of its obsession with Light Rail and work with what we have. The Bus Route is a remarkable existing piece of road infrastructure that is begging for better management to be allowed to reach its full potential.

Prior to the implementation of the Lagos Bus Rapid Transit System in Nigeria, the situation there shared many similarities to the situation here in T&T, making it an excellent case study. Although a North/South route is a more long-term prospect, the modernisation of the East/West corridor PBR is easily achieved in the medium term.

Photo: (From left) Stephen Williams (Acting Police Commissioner), Major General (Ret’d) Edmund Dillon (Minister of National Security), Rohan Sinanan (Minister of Works and Transport), Wayne Richards (Transport Commissioner) and Maxie Cuffie (Minister of Public Administration and Communications).
(Copyright News.gov.tt)

5. Do not make enemies of the foreign used car industry: Try to work with them instead. I agree that theirs is an industry that requires restructuring and redirection. But at the same time, I recognize that, in the absence of a safe and efficient public transportation network, for better or worse, these dealers democratised car ownership; for that fact alone, they should be respected.

Instead, they have been conveniently demonised. Successive governments have given lip service to the idea of sustainability while at the same time providing the enabling policies for RoRo dealers to flood the country with more cars than our road infrastructure could reasonably handle.

The fact is that it will take time for us to be weaned off our unhealthy obsession with cars, something of a national sickness, and the foreign used car industry is an important player in this game. If Government’s intention is to encourage the importation of more hybrid/fuel efficient vehicles, then a less adversarial approach and more incentivisation is needed.

6. Explore other options regarding the proposal to build a highway to Toco: This is not a short-term project but I have taken note—with some trepidation—of how gung-ho the Rowley-led Government appears to be about this proposed major piece of construction. Have all the options been seriously considered?

We are often guilty of not learning from our past mistakes (e.g. doing away with our rail system) but that should not be the case in 2017/18. We know that once upon a time the villages along the North Coast were efficiently linked by a ferry system. Perhaps, this could turn out to be a far less ecologically damaging and equally effective mass transit option?

Photo: Young Matura football fans enjoy some 2015/16 National Super League action at the Matura Recreation Ground.
(Courtesy Nicholas Bhajan/Wired868)

That’s it, the full list of my humble suggestions. I’d like all those who feel free to pick it apart to also feel duty-bound to explain why any of the suggestions simply cannot be acted upon and to attempt to propose improvements/refinements or credible alternatives.

After all, serious people know that, like the one between Trinidad and Tobago, the link between ‘constructive’ and ‘criticism’ is inescapable.

Can you cope with the challenge, commentator?

About Jabal Hassanali

Jabal Hassanali is a semi-retired, Trini urban planner-cum-English teacher, who is currently stuck somewhere in Asia. He has made a career of being in-between countries and in-between jobs and sometimes, mainly in his in-between moments, fancies himself a writer.

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22 comments

  1. One of the Minister’s justified the increase by referencing energy producer Norway’s high diesel prices. What she neglected to mention is that the Norwegian citizens enjoy quality public service at all levels and in all areas. Can we say we ever got value for money?

  2. I like that idea ,but always remember “don’t touch the parasitic oligarchy’ No one dare tell the conglomerates to stop selling cars in this country,but you targeting the Roll- on roll off. which afforded the small man to own a car. Reality is that T&T has too many cars per capita with some owning 5 and 6 and all going in same direction. No Carpooling in T&T that’s a curse, to oil rich, dependency people facilitated by successive governments to score political points. Always short term micro wave adohc ideas,which results in long tern ramifications for the population, There is a mentality here of me and mine, not sharing. Band your belly and sacrifice, citizens yes , businessmen and Trade unionist no, just complain and criticise. We will survive. I love my country

    • Preach sister. We have not yet appreciated that even with removal of the fuel subsidies, Trinidad is paying the least for fuel in the Caribbean. The country paying the LEAST is VENEZUELA – and we don’t want to go there, ent? The country that pays the MOST is an oil producing country whose citizens gladly pay the highest price per litre – Norway – one of the top five countries to live in!

  3. Brilliant ideas. I do have some comments to add, referenced as numbered in the body of the piece by the author.
    #1 – This is an excellent way to not let persons in a lower income bracket feel the pinch and it would help to regularize PH drivers. I don’t see any way other than using the smart card as the author suggested. However, to make this work with the idea put forward in #3 to push CNG forward, I would further suggest that the percentage off to public transport operators be relative to the last price of fuel i.e. the discounted rate is kept at the previously adjusted fuel price. Until such time that the cost effectiveness for running on regular petrol, regardless of the subsidy, is less cost effective than using CNG. I am sure the metrics can be worked out and some sort of projection made based on the classes of vehicles we have in use for transport. The maximum fuel subsidy for public transport should eventually reach a point where it is still better to go CNG. I think that may be good incentive for the government to start putting up more CNG stations. For starters, I think they should revert to a fuel subsidy price from last year and ease the public transport service into the adjustment at regular intervals as the burden is huge for lower income earners.
    #2 – I don’t agree with this idea for the same reason that I think the author believes that it will be abused. Instead, I would like to suggest that you should offer the same fuel subsidy to SMEs or those that e.g. don’t meet the requirements to pay business levy, that make use of transport vehicles. Not just those that use diesel vehicles though. It may be a good way to get businesses fully on board for tax monitoring purposes. Larger companies should have regulations imposed on them for emissions and the government should impose fines on violators. The smaller businesses should be exempt from these fines for a grace period…possibly to coincide with the cost effectiveness of CNG vs. regular petrol.
    #3 – A government is always better when they have the foresight and planning skills to take their country forward where anything progressive happens easily. Anything that has to be imposed by force is not a reflection of the population but on the lack of good leadership.
    #4 – I continue to believe that tram systems within cities are an excellent idea.
    #5 – Agreed.
    #6 – A ferry system is always a better option. I suspect any government, not only the PNM, will be taking that highway to Toco full speed ahead. Whether the government feel they in charge or opposition, it’s never about what we feel. Tourism sells, but the approach that lacks due consideration for the environment makes me feel they can’t possibly be interested in ecotourism.
    Kudos to the author for such a progressive piece.

  4. Would have preferred the introduction of a vehicle tax for households with more than one car (maybe 2?) and companies with more than X number of vehicles. A tax that varies depending on the type of vehicle and the number the vehicle is in the household or company’s fleet. So the tax rate for the third vehicle would be higher than the rate for the second etc etc.
    I think that would have been a fairer way to make up the cost of the fuel subsidy rather than an across the board adjustment which obviously is felt more by lower income earners.

    • People avoiding paying VAT. You think they would pay even more vehicle taxes? Because vehicles are already heavily taxed on entry as it is. No. The subsidy needed to go a long time ago. Especially as it is it benefits higher income earners more than the poor. With a rate that is now pegged to market prices and the future outlook for low fossil fuel prices, we will adjust. People don’t realise that we import oil to refine into gasoline (super/premium) and diesel and pay MARKET PRICES for it. The government then subsidizes it at the pump. That’s why in the years when oil prices were high the subsidy climbed to 7 and 8 billion. We don’t save on the subsidy when prices are low either because we also have less to spend, like now. What we should do is encourage consumers to be more discerning and conscious. Prices in this place raised even when the subsidy was fully intact. We should look into solar energy for domestic users, schools and public buildings especially.

    • Failure to pay mandatory taxes is a management issue, not a policy issue.
      Policy-wise, once you increase/decrease taxes/subsidies across the board , you benefit the rich. Policy that benefits the rich and burdens the poor is policy I don’t support.
      So in this case I think the better solution would be to improvement management rather than increase the burden on lower income earners.
      Subsidy removal seems like the lazy way out and does nothing to improve the system.

    • I edited my comments.

      There are many other sound reasons to eliminate our fuel subsidy as well. It’s lazy to maintain it. http://priceofoil.org/fossil-fuel-subsidies/

      Yes we need to improve tax collections but we 1. Axed the tax and 2. Condemned the TTRA and aren’t pushing the Opposition now to support it.

    • That mentions direct to consumer subsidies but is mostly talking about subsidies to the industries for development etc which I don’t support and which have a different impact from straight to consumer subsidies at the pump.
      But I completely agree with you on the need to expand into clean energy sources. I think it would be great if all HDC housing developments came with solar panels. I also agree with encouraging consumers to be discerning and conscious. I just think low income earners who are most affected by the subsidy removal aren’t the ones we should be asking that of. They don’t have much in the way of material possessions to be particularly conscious of. It’s the wealthy with how many ever cars and electronics out the wazoo and who run AC units all day who need that sort of encouragement. A subsidy removal that doesn’t hit them particularly hard doesn’t generate that sort of discernment.

    • But the fuel subsidy here is accessed by everyone. Corporate people don’t pay different at the pump. Yet prices increase and almost never decrease regardless. Even when things change. When the price at the pump drops, do you realistically see our business community passing on the savings to consumers anyway when they are very comfortable adding increases to stock in hand and other predatory behavior?

    • Gosh Chabeth Haynes! Something I was in discussions about – those HDC houses

    • Alana, I’m agreeing with you that we don’t see price drops and the fuel subsidy is accessed by everyone which makes the whole thing disproportionately unfair to lower income earners. Which is why I was suggesting the vehicle tax that would directly affect higher income earners and hopefully do something to even out the burden of the gas subsidy.
      And I mean the vehicle tax to be something you file with your tax returns. Not added on at the time of sale. So again, it would require a proper tax collection system so I’m with you on the revenue authority frustration.

    • Savitri, what happened with the discussions?

    • UWI has a study on our Fuel Subsidy here:
      [PDF] Fuel Subsidies in Trinidad & Tobago – UWI St. Augustine
      https://sta.uwi.edu › revenue › documents

    • Nada, they wanted their own ppl and I wasnt prepared to give too much info

    • Chabeth Haynes What about taxis and maxi taxis whose owners do not pay taxes? In you list of vehicle taxes, there must be one on taxis. Maybe you mean this to be taken up with the Revenue Authority. A lot of our problems stem from poor tax collection by the IRD but I do like you vehicle tax idea.

    • We need to do a better job collecting taxes from individuals.
      If we tax maxis and taxis, we’ll probably see a fare increase.

    • If they are paying taxes, we might not see fare increases when we find out what their income levels are. Who knows?!

  5. I like all your ideas they are great. The problem lies at the end user the John and Jane public. We will try to circumnavigate the systems. How long we talking public service reform, millions spent on training and the service barely changed. It’s more a mindset change pushed not from only the government but the private sector taking a commanding step. However our private sector are risk shy. So they won’t join together and assist in a development program/ with government, hundred percent funding by government instead of sharing with tax credits. The other issue when the benefit are passed to those operators they have not passed it on public

    • Good point. We exist in silos. Public sector, private sector and the people Each side waiting for the other to blink even as we head straight to a cliff.
      How do we get the parties to finally begin to work together?
      Since the public can influence the public and private sector, then I figure it has to start there. First with understanding our power and then with understanding how to use it.
      That’s the next challenge. How do we get there without the process being tainted by politics?
      What you think Akins Olatunji Vidale? Bryan St Louis?

    • Lasana the first thing is we have to learn to read, discuss, share and analyse. In fact what you are doing here on Wired is sorely missing from mainstream engagement. I am not sure how to summarise my response in a comment though. lol.

    • Lasana as a people we have to become more conscious and aware of our surroundings and the issues that affect us which are all political in nature. We must also appreciate the fact that we all do not belong to the same class and as such our interests would not be the same. So what do we do? Well it is time we as a people meaningfully engage in the type of conversation and do whatever is necessary to bring about the type of change we need in our society politically, socially and culturally. If we do not act then no one will do it for us as the status quo satisfies those who believe they are the owners of the nation.