In an effort to not burden the Trinidad and Tobago consumer who is now faced with a 9.5 per cent increase in the price of cement by Trinidad Cement Ltd, Government plans to approach Caricom for a relief of the 15 per cent duty on cement imported from outside the region.
Bharath said TCL is requesting a waiver from the National Gas Company of its escalation clause for the next eight years. TCL also wants to be reclassified as a middle user which will entitle the company to a lower gas price.
Cabinet has also mandated that Government—particularly the Ministries of Trade and Energy — sits with TCL to look at the possibility of negotiating lower gas prices for the company, "with the proviso that any decrease in the cost of gas would be passed on to the consumer".
So said Trade Minister Vasant Bharath as he addressed the issue of the increase in cement prices which became effective from Wednesday.
He was speaking yesterday at the post-Cabinet press conference at the Office of the Prime Minister, St Clair.
Bharath said Government wanted to help TCL, which is 80 per cent locally owned, in its efforts to become more productive.
He noted that Government had embarked on an aggressive constructive campaign for the period 2013-2015 as well as a vigorous housing construction programme.
He said any increase in the cost of a fundamental input of the construction sector would jeopardise these programmes.
Moreover the construction sector was now coming out of a depression.
"It is therefore important that we continue to develop the construction sector which employs 100,000 people," Bharath said. He also stated Cabinet looked at two options-the request to remove the 15 per cent duty on imported cement and natural gas price concession to TCL.
Bharath said he had met with the management of TCL in early December to discuss the possible increase in the price of cement. He said TCL argued that the increase was based on the cost of inputs having gone up.
He asked the manufacturer to take a second look at the issue and come back to him to discuss whether the price increases were justified or whether TCL was passing on its possible inefficient overheads to the consumer.
He said TCL's position then, "as it is now", was that energy prices which amount to around US$12 million a year (for natural gas); its debt servicing which bunched (TCL owes about $1.9 billion to local financial institutions), its cost of labour and the cost of packaging and spares had increases to the point where a 90 lb bag of cement had risen in cost from $52.50 to $59.50.