Gov’t eyes CET suspension as cement prices rise

Guyana may once again move in the direction of suspending the Common External Tariff (CET) on cement imported from countries outside Caricom owing to its current high price, which government feels is being “orchestrated” by “shark operators” out to “make a killing”.

Cabinet Secretary Dr Roger Luncheon yesterday told reporters that once the government has established beyond reasonable doubt, for the purposes of the Council for Trade and Economic Development (COTED) that there are shortages and it is a reflection of insufficient production, it will move ahead to allow extra-regional importation of cement.

Should the government move in that direction it would not be its first attempt to wriggle out of the agreement it has with Trinidad Cement Ltd (TCL), the parent company of TCL Guyana Inc (TGI), as the sole provider of cement to Guyana and other Caribbean countries. In 2009, the government had suspended the CET but this was challenged by TCL in the Caribbean Court of Justice (CCJ) which ruled that the government was in breach of the Revised Treaty of Chaguaramas (RTC) by failing to apply the CET on cement.

Dr Roger Luncheon

TCL and TGI had accused the Guyana government of breaching the RTC by unilaterally suspending the CET on cement imported from countries outside Caricom and was later granted leave to sue the government after approaching the CCJ.

TCL owns 80% of the Guyana-based TGI, which imports cement in bulk from TCL and Arawak Cement Limited, a wholly owned subsidiary of TCL Inc in Barbados.

“There seems to be some truth to the allegation that the cheaper priced cement is being hoarded and as such only the expensive priced cement is on the market and this essentially is the basis for us bringing it to the public’s attention and also Cabinet to be examining interventions…,” Luncheon said yesterday.

Stating that “shenanigans have surfaced again”, Luncheon said Cabinet was notified that there has been an unusual price increase for cement to about two times the normal retail price of about $1,400 a sack to as much as $2,600 per sack.

“Fair trade and competition rules and regulations are being breached as we speak and they are being breached by major players in the retail sector,” Luncheon said.

He said TCL and its recent supply shortfall have not helped the domestic users of cement and Cabinet was of the opinion that interventions were necessary.

Those interventions include invoking the provisions of the fair trade and competition legislation, exposing those responsible for, contributing to, participating in and benefiting from the price increases and the resort to suspending the CET on the importation of cement.

“These unjustified price increases have happened before [and] they are now reoccurring. Cabinet noted that similar unjustified price increases are also being seen in the public transportation sector where minibus operators have started to selectively increase fares…” he added.

He said it appears as if TCL has “selectively altered” its geographic spread of production resulting in Guyana, Suriname and Trinidad being more affected because production has moved towards Jamaica away from this part of the Caribbean.

“As a consequence there is a pressure on prices and notwithstanding the presence of other suppliers… that there still is an upward pressure,” Luncheon said.

He said Acting Commerce Minister Irfaan Ali has been meeting with the major players in the retail sector and pointing out the phenomenon that the government feels is orchestrated and is much more than the under-production by TCL

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