COTED drops protections for petroleum market for a year
Published:Monday | November 19, 2018 | 12:00 AMAvia Collinder/ Business Reporter
The Council for Trade and Economic Development (COTED), has suspended the common external tariff on petroleum products imported from outside the region by CARICOM member states, for a period of one year, effective November 16.
The decision, taken at a meeting in Georgetown, Guyana, earlier this month, was a direct policy response to the imminent shortage of regional supplies that's expected to result from changes at the Petrotrin refinery in the oil-producing nation of Trinidad and Tobago.
Petrotrin is in the process of locking down its refinery and exiting production but plans to import refined petroleum products from other regions for re-export.
The tariff, which previous reports indicate ranges up to 10 per cent, is meant to protect the regional oil market, in which the dominant player currently is Trinidad.
Jamaica's Petrojam refinery buys supplies from Trinidad, as well as other countries outside the region, but efforts at a comment from Jamaica's petroleum officials on how the COTED decision would impact Jamaica were unsuccessful up to press time. Winston Watson, group general manager for the Petroleum Corporation of Jamaica, parent company for Petrojam, was said to be travelling.
However, its likely to be a welcome move as trade and energy ministers over time have lobbied for changes to the Common External Tariff (CET) regime, saying it would free oil-dependent countries like Jamaica to source petroleum products at the cheapest possible prices.
In the wake of media reports that Petrotrin intended to import petroleum supplies for Trinidad's market after exiting production, Trinidad, in a correspondence dated October 5, advised COTED that it would be able to supply gasolene, gasolene centane, aviation fuel, mogas, and diesel until November 30 under the CARICOM rules of origin but thereafter would adopt a new business model as a petroleum importer.
Its plan, said COTED, is to continue as a regional supplier "under commercial market conditions".
Trinidad voted in support of the blanket suspension, which will last for one year to November 15, 2019.