Opposition Member of Parliament for Diego Martin North/East Colm Imbert was yesterday labelled as "naughty north east" by Government MPs, as Finance Minister Larry Howai denied claims the Government broke the law when it raised the price of premium gasoline to $5.75 a litre.

During his contribution to the budget debate, Imbert had claimed that Howai acted in breach of the Petroleum Levy and Subsidy Act by raising the price of premium gasoline.

Winding up the debate in the budget last night, Howai said according to advice received from attorneys from the Energy Ministry, there was no breach in the Petroleum Levy and Subsidy Act.

"Mr Speaker, I have received the opinion of attorneys from the Ministry of Energy and Energy Affairs and I wish to state categorically that there has been no breach," Howai said, to desk-thumping from the Government benches.

"That act always operated and continues to operate as intended to provide the mechanisms to fund the subsidy on petroleum products, collect the levy from oil companies that is used to offset the subsidy," Howai said.

Howai said the levy is paid into the Petroleum Products Subsidy Fund and "monies utilised go toward the subsidy payments on petroleum products".

"There is no distinction made between the individual subsidy amounts on the various fuels in the law as regard the applications of the levies collected," Howai said.

Howai said "for over a decade now the amount of money paid by oil companies as a levy has been insufficient to cover the subsidy on transportation fuels".

"The estimated total subsidy claimed for fiscal 2012 is $4.41 billion and the total levy payments for 2012 is estimated at $668 million, which is only 15 per cent of the total subsidy claims," Howai said.

"This would result in an estimated total government subsidy liability for fiscal 2012 of approximately $3.74 billion or 85 per cent of the total subsidy claims. In summary, Mr Speaker, the levy is woefully insufficient to cover the subsidy. The difference is a liability which is met by the Government," Howai said.

Howai tore into figures quoted by Imbert.

"The true market price of premium gasoline will be approximately $7 or $8 a litre, including VAT (Value Added Tax). This means that the subsidy on premium gasoline at present is $1.16 a litre. This means the Government continues to subsidise premium gasoline," Howai said.

The budget was passed last night.