CAL, LIAT stick to positions on fuel subsidy contention

Recent talks have again failed to resolve the issue of the fuel subsidy Caribbean Airlines (CAL) receives from the government of Trinidad and Tobago, which LIAT argues is illegal.

Further, Kingston has complained that a subsidy Port-of-Spain gives to Trinidadian manufacturers puts their Jamaican counterparts at a disadvantage.

Prime Minister Dr. Ralph Gonsalves, chair of LIAT’s shareholder governments, told reporters in Kingstown last week that he is bent on resolving the subsidy issue as it relates to LIAT.

But he said that during the recent talks in Trinidad, neither LIAT nor CAL budged from their respective positions.

“I am of this view that this matter is going to be resolved only through arbitration and or the Caribbean Court of Justice. I don’t think that Trinidad and Tobago would want to settle this matter,” he told a press conference in Kingstown.

He said that during the talks, the position of the different persons who spoke for Trinidad and Tobago was “to admit that they do a subsidy then to deny that they give a subsidy, then that if they give a subsidy, it doesn’t mean that it impacted negatively on LIAT.

“And I simply ploughed along with the facts on my side and the law on my side,” said Gonsalves, a lawyer.

“We didn’t yield, and, except for their equivocation as to whether they had a subsidy or not, they didn’t yield,” Gonsalves further said.

He said the meeting should have been a private one.

“I am still hoping that there would be a private meeting. But I put all the matters transparently to the public because this is not a friend-friend business. This is a serious matter concerning the people.

“I don’t see how I can be asked to pay in LIAT $130, $140, $150 U.S. a barrel for fuel and CAL pays between $50 and $60 and you coming on the same routes with me. That’s unacceptable, it’s wrong, it’s unlawful. And I have the facts and I have the law on my side with this one,” he said.

“If we can’t settle it amicably, we will have to take the option of going to arbitration in one direction or under the CCJ in another.”

Gonsalves said Trinidad and Tobago said they might remove the subsidy all together.

But he said that while that is fine with him, even if the subsidy is removed, LIAT still would have suffered loss and damage and can claim it.

“But if we are to get that subsidy or something close to what CAL gets, we can drop the fare in LIAT. That’s the reality,” he said.

He further said there might be a lot of reasons why CAL loses a lot of money.

“And it would lose more money if it didn’t have the subsidy. So, on this matter, I am not mincing my words,” he said.

He further said that when he raised the issue of the fuel subsidy, Jamaica raised the matter of subsidy for manufacturers in Trinidad and Tobago.

“… they get a subsidy too,” Gonsalves said of the Trinidadian manufacturers. “They deny it but they get a subsidy too,” Gonsalves said.

He said the only way Trinidadian manufacturers can deny getting a subsidy is if all countries pay the same price, post-refinery, for fuel, not taking into account transportation, insurance and other mark-ups.

OECS reservation

Gonsalves said the fuel subsidy fired reservations in the Organisation of Eastern Caribbean States (OECS) ahead of joining the CARICOM Single Market and Economy.

“We had a study done in the OECS which showed that the OECS could lose, if we entered the Single Market. But we went in saying what we lose on the swing we gain on the roundabout, for instance the CARICOM Development Fund.

“But the CARICOM Development Fund ended up not having enough money as it should have had. So we lose on the swings and we ain’t really gain that much on the roundabout…

“This subsidy is a serious problem in CARICOM — fuel subsidy which Trinidad airline and producers of goods and services get,” Gonsalves said.