Monday’s cut in the fuel subsidy will see Government saving $550 million.
This was revealed by Finance Minister Colm Imbert yesterday following the T&T Chamber of Industry and Commerce’s annual Post-Budget Analysis Meeting with the business community at the Hyatt Regency, Port-of-Spain.
With the price of super gasoline moving from $3.58 to $3.97 per litre and diesel increasing from $2.30 to $3.40 per litre at the pumps with immediate effect, Imbert was asked how much money Government expected to save having steadily removed the subsidy over continuous budgets.
“That is going to give us about $550 million with the changes in fuel prices. This is a significant amount,” Imbert said.
He said the $550 million which Government will save in its coffers will be for fiscal 2018. He said in 2017 Government had spent about $800 million in fuel subsidy, but when they came into office in 2015 the fuel subsidy was approximately “$1.5 billion.”
With the two decreases in the fuel subsidy in the last few months, Imbert said the figure had dropped to a staggering $800 million.
“Now it will go to zero. So the total savings over the last two years is about $1.5 billion.”
In delivering the feature address at the meeting, Imbert admitted that the removal of the subsidy will no doubt affect the ordinary man.
“It will increase the cost of transportation and that will find its way into the cost of goods and services. But we felt that we could not continue with two subsidised motor fuels to the extent that we had in the past.”
Noting that in 2014 the fuel subsidy had reached $7 billion, Imbert said, “If you look at that very carefully, what is a better use for that $7 billion?”
Answering his own question, he said $7 billion could be better used to stimulate the economy through incentivised programmes or provide help for the poor and vulnerable.
“We felt that over time we had to remove the fuel subsidy.”