Gas dealer challenges Govt on price hike

A High Court judge yesterday granted an interim injunction stopping Government from carrying out an increase in the wholesale market of liquid petroleum fuel which came into effect following the  2004 Budget which was presented by Prime Minister Patrick Manning.

The company, United Independent Petroleum Marketing Company Limited (UNIPET),  which got the injunction from Justice Mark Mohammed yesterday, is a private company which has a licence for wholesale marketing of liquid petroleum fuels. And it is saying  the amendment of the petroleum production levy and subsidy (Gross Margin) order 2003, is a device to put  their company out of business. UNIPET claims that the order has given the National Petroleum Company (NP) better prices on  gasoline. UNIPET said it is the only private company, along with NP, which carries out the business of wholesale marketing of liquid petroleum in TT. Notwithstanding that, NP is the only company which can fall within the category of State company, since it falls under the portfolio of the Minister of Energy. And as a result, it will enjoy better profit margins as a State enterprise under the new order.

UNIPET is also alleging that the Order is a  device to discriminate against them to the advantage of  NP and put them out of business. Further, they allege, the order is catastrophic to their business and renders their licence useless. UNIPET went on to claim that the Act does not authorise or permit the Minister of Energy to fix gross margin in respect of companies but only in respect of petroleum products. UNIPET is saying that the order has increased NP’s wholesale margins for premium and regular gasoline, kerosene and auto diesel by 26 percent, while their wholesale margin decreased by 26 percent. NP wholesale margin for unleaded premium gasoline increased by 16 percent while UNIPET’s margin decreased by 55 percent. If this happens, UNIPET says that NP will again have a monopoly of the sale of liquid petroleum fuels. Mohammed said that UNIPET has made out a prima facie case and he was also satisfied that the court in judicial review proceedings can grant an interim injunction against an officer of the State.

However, he was mindful that an interim injunction against an officer of the State should only be granted in cases of extreme circumstances. He said that this was an exceptional case and noted that by ordering the injunction the court would prevent the risk of financial liability since UNIPET’s only competitor is a State-owned company and would not be levied on. This would place NP in an advantageous position. Mohammed ordered a stay of implementation or the carrying into effect the provisions of the order of the petroleum production levy and subsidy Act 62.02 and granted leave for UNIPET to apply for judicial review. He further granted a restraining order against the Minister of Energy from implementing the levy until November 18, 2003. Mohammed also granted stay from implementing the levy pending the hearing and determination of the judicial review.