By Newsday Staff Thursday, October 4 2012

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Gift of elm tree: Energy Chamber president Roger Packer presents a Chinese elm tree to Sandra Chin-Yuen-Kee for her service to the organisation during...

Car owners are free to buy any type of gas for their vehicles, Finance Minister Larry Howai said yesterday.

Acknowledging that any car owner can use premium gasoline in their vehicles, Howai said it is not mandatory for everyone to switch to super (or diesel) and all persons are free to choose the kind of fuel they put in their vehicles.

Premium gas rose from $4 to $5.75 per litre as part of Howai’s budgetary measures to cut back on the fuel subsidy. He expects to save an estimated $100 million from this move. For now, the fuel subsidy remains on super gasoline, which costs $2.70 per litre, and diesel at $1.50 per litre.

Following a luncheon hosted by the Energy Chamber at Hyatt Regency, Port-of-Spain, Howai, commenting on the ongoing debate about the rationale behind increasing the price of premium gasoline, said Prime Minister Kamla Persad-Bissessar was not wrong when she spoke about high-end vehicles using this fuel.

“The ones that need to use it (premium), the ones that actually need to use it are the high-end vehicles but there are people who (own) a lower end vehicle who use it in their vehicles but it is not necessary that they use it.”

Suggesting there may be need to better educate the public on this issue, Howai said, “If you are concerned with price and if your vehicle is designed to operate on a lower octane rating then you should use the opportunity to switch to a lower octane rating.”

He added, “The individual is perfectly free to choose. The thing about it is that, they are not going to be at any disadvantage in doing so at all.”

Saying his Budget estimates assumed a certain number of people would switch from premium to super, Howai reiterated, “Nine percent by way of volume and six percent of the subsidy goes into premium.” In contrast, Howai said super is “ 41 percent volume or 45 percent of the subsidy” while diesel is “ 52 percent volume and 44.26 percent of the subsidy.”

Reporters asked Howai whether Government planned to further reduce the fuel subsidy this year or before the presentation of the 2014 Budget by increasing the prices of super and diesel.

“Probably not but we have an inter-ministerial committee that is meeting to consider what are the different strategies we could put in place and whether there is room for us to do it earlier,” Howai said.

He explained “if based on the plan that we develop we think there is room to do it earlier, we shall do so but the current plan that we have on the table is to do it in line with the roll out of the CNG.”

In his speech to the Chamber, Howai calculated that a fuel subsidy of $3 billion is the “equivalent of building three hospitals, 25 schools and providing ten percent increases to public servants every year on an annual basis.”

Reiterating that Government had a $1.5 billion business plan to convert gasoline vehicles to CNG, Howai said, “What I’m thinking of doing is perhaps doing a presentation to the media where we can do a full presentation on the plan, so that you can have a better idea of how it’s going to work so you can communicate it out.”

He said he needed to confirm whether “there are any processes that might be violated” if the media is briefed on this plan because it involves establishing a separate company that will build about 62 multi-fuel stations towards the end of 2013, over a five-year period.

“Some of them may be on what we describe as the mother-daughter concept where you use mobile delivery vehicles for selling and distribution of the CNG as well as physical stations,” he explained.

In seeking to reduce the fuel subsidy, Howai disclosed Government was not looking at increasing the prices on automobile fuels alone. “There are opportunities for us to look at marine diesel for instance. Whether there are programmes we can put in place to deal with that as a separate arrangement altogether,” he said.

While he did not know whether there would be an increase in the price of jet fuel, Howai said, “There are different options that we are looking at in order to accelerate that implementation timetable (to remove the subsidy).”