Trinidad: 21 Unipet gas stations close in protest over profit margin

 (Trinidad Guardian) Thou­sands of dri­vers were af­fect­ed yes­ter­day as Unipet’s 21 ser­vice sta­tions across the coun­try re­mained closed when deal­ers sought to send a mes­sage to the Gov­ern­ment that the prof­its they were mak­ing were way too low for them to con­sid­er stay­ing in busi­ness.

The clo­sure of the sta­tions led to pres­sure on the 100-plus NP ser­vice sta­tions that re­mained open as work­ers at those sta­tions found them­selves flood­ed with more ve­hi­cles than they usu­al­ly catered for dai­ly.

In some cas­es, fu­el ran out at NP sta­tions and those who felt the brunt of the bur­den were com­muters, some of whom were forced to wait in long lines for well over an hour to get fu­el.

When dri­vers showed up at the Unipet pumps yes­ter­day morn­ing, they were greet­ed with signs that stat­ed “No Fu­el Sales” or “We do apol­o­gise to our val­ued cus­tomers for the in­con­ve­nience. This is as a re­sult of the dire fi­nan­cial re­al­i­ties of the sec­tor. Over the past 4 years, we have made the best ef­fort to avoid this con­se­quence, but it is now be­yond our con­trol.”

One el­der­ly mo­torist said he had to leave Princes Town to get gas in Co­coyea as the sta­tions were closed. In San­ta Flo­ra, mo­torists who went to the Unipet sta­tion on­ly need­ed to cross the street where the NP sta­tion was lo­cat­ed.

In San Fer­nan­do, it was most­ly in the ear­li­er parts of the morn­ing that caused con­ges­tion. Sup­ply tankers were seen top­ping up the gas sta­tions, en­sur­ing con­ti­nu­ity in sup­plies but mo­torists were wor­ried that a fur­ther shut­down will cause peo­ple to pan­ic and cre­ate long lines at the pumps.

In Cen­tral Trinidad, mo­torists were dri­ving all over to fill their tanks, which cre­at­ed con­ges­tion in sev­er­al ar­eas. It was Unipet sta­tions that were closed while NP re­tail­ers con­tin­ued op­er­a­tions.

Unipet CEO Dex­ter Ri­ley said that the com­pa­ny will have a chal­lenge with its sup­ply this week and that con­sumers could ex­pect one or two hic­cups in pur­chas­ing gas.

Ri­ley not­ed that pe­tro­le­um deal­ers across the mar­ket faced sig­nif­i­cant chal­lenges over the past few years, which af­fect­ed their abil­i­ty to pur­chase gas to sup­ply their cus­tomers.

“Since the levies were ad­just­ed four years ago, things have been very bur­den­some for the deal­ers. In­creased tax­es and un­sus­tain­able mar­gins al­so have been a con­cern for deal­ers. The in­dus­try has re­al­ly been af­fect­ed fi­nan­cial­ly. Deal­ers have a prob­lem with their abil­i­ty to pur­chase gas,” Ri­ley said.

But the pres­i­dent of the Pe­tro­le­um Deal­ers As­so­ci­a­tion (PDA) Robindranath Narayns­ingh is in­sist­ing that it is not hold­ing the coun­try ran­som un­til their mar­gins are in­creased.

“Why would you con­sid­er a fi­nan­cial cri­sis to be hold­ing peo­ple ran­som?” he asked adding, “If you can­not pay your bills, are you hold­ing your fam­i­ly to ran­som when he says he wants a new shoe?”

He ar­gued that the PDA’s in­ten­tions were to give a bet­ter ser­vice to the com­mu­ni­ty. He in­sist­ed the ac­tion did not con­sti­tute a strike.

“If it was a strike the whole place would have been shut down. Some sta­tions were closed, some were not giv­ing full ser­vice,” Narayns­ingh said.

“The prob­lem is that the gas sta­tion deal­ers mort­gaged their homes to raise cap­i­tal to pro­vide a ser­vice to their com­mu­ni­ties and the pub­lic at large. They’ve cut ex­pens­es, in­vest­ed mon­ey, they buy the gas and they sup­port this in­dus­try. The pe­tro­le­um deal­ers do this and as a re­sult, it be­comes un­sus­tain­able be­cause of the small mar­gins. The ex­pens­es are more than in­come. They’re run­ning at a loss. Be­sides that, it ties up your cash flow. You can run a busi­ness with­out a prof­it, but when cash-flow dries up, then you start to see trou­ble.”

He said that some deal­ers re­port­ed that they saved mon­ey when they closed their sta­tions.

“It might be cheap­er to shut down a gas sta­tion for one day than run it for sev­en,” he said adding that mar­gins for the var­i­ous fu­els range be­tween 4-4.5 per cent; the low­est in the Caribbean.

Mean­while, speak­ing yes­ter­day on CNC3’s the Morn­ing Brew, Unipet CEO Dex­ter Ri­ley said the in­dus­try has un­der­gone chal­lenges since the levies were ad­just­ed four years ago.

He too not­ed that the in­dus­try was hav­ing se­ri­ous fi­nan­cial prob­lems.

The com­pa­ny lat­er is­sued a state­ment say­ing that “the fu­ture vi­a­bil­i­ty of the liq­uid pe­tro­le­um in­dus­try is in the hands of the reg­u­la­tor who has all the in­for­ma­tion with re­gard to the changes that are nec­es­sary to the cur­rent mar­gin mod­el and tax struc­ture to make the in­dus­try sus­tain­able at no ex­tra cost to the con­sumer”.

Paria Fu­el Trad­ing Com­pa­ny al­so is­sued a state­ment yes­ter­day to as­sure that there was no short­age of fu­el.

“The Com­pa­ny loaded Road Tank Wag­ons (RTWs) from both the Na­tion­al Pe­tro­le­um Mar­ket­ing Com­pa­ny Lim­it­ed (NP) and Unipet at the Pointe-a-Pierre gantry this week­end (be­tween Sat­ur­day, Oc­to­ber 26 and Mon­day, Oc­to­ber 28, 2019),” it said.

The state­ment con­tin­ued, “NP loaded 44 thou­sand bar­rels of fu­el (13,500 bar­rels at the gantry and 31,000 bar­rels at the Pointe- a-Pierre port) and Unipet loaded just over 10 thou­sand bar­rels at the gantry. Paria con­tin­ues to have healthy in­ven­to­ries of all cat­e­gories of liq­uid fu­el.”

Thus far, min­is­ters of gov­ern­ment have not re­spond­ed to the me­dia. Ef­forts to reach En­er­gy Min­is­ter Franklyn Khan were fu­tile.

When Guardian Me­dia con­tact­ed Az­izah Baksh-Backredee, Per­ma­nent Sec­re­tary in the Min­istry of En­er­gy, yes­ter­day she said, “We will send out a re­lease short­ly.” That re­lease nev­er came.

This is not the first time deal­ers took ac­tion to per­suade the Gov­ern­ment to ad­just mar­gins. In 2016, deal­ers re­ject­ed cred­it and deb­it card pay­ments from cus­tomers, say­ing that it was a cost-cut­ting mea­sure.

Guardian Me­dia asked Narayns­ingh if the shut­down will con­tin­ue to­day, and he said, “It all de­pends on how the Gov­ern­ment deals with this sit­u­a­tion. If they come to us to ne­go­ti­ate, we can reach a so­lu­tion.”