Some motorists who use premium gasoline in their vehicles do not need to, Prime Minister Kamla Persad-Bissessar said yesterday.
And she advised that they can use super gasoline instead.
In his 2012/2013 national budget presentation on Monday, Finance Minister Larry Howai announced the price of premium gasoline had moved from $4 to $5.75 a litre—a 44 per cent increase—from yesterday.
Persad-Bissessar had told the media, following the budget presentation, some six per cent of the motoring public would be affected by the increase—mainly users of high-end luxury vehicles, such as Audis and BMWs.
The Prime Minister clarified yesterday that only six per cent of the subsidy (and not motorists) would be affected by the move to reduce the subsidy bill. "I am advised that it is about six per cent of the subsidy and nine per cent of the volume which will be impacted... I am also advised that some people use premium but they do not have to," the Prime Minister told the Express by phone.
Persad-Bissessar said the decision to increase the cost of premium fuel was well thought out and took into consideration all aspects.
"There is no justification for 'maxi' and taxi drivers to increase fares," she stressed, as she reiterated that motorists who own high-end vehicles such as Audis and BMWs were the ones who can afford to pay the increase.
Questioned on whether Government would be moving to convert State vehicles to use Compressed Natural Gas (CNG), Persad-Bissessar noted that Howai, in his budget presentation, stated that Government was putting in place a framework for the greater use of CNG.
The Prime Minister noted further that a comprehensive business plan was developed, which will invest $1.5 billion in converting gasoline vehicles to CNG.
Asked what kind of feedback she has had on the budget thus far, Persad-Bissessar said, "The reports have been very positive... and we are very encouraged. As I said before, the budget is a statement and the real challenge lies in implementation."
"Over the next several days, after the Opposition Leader's reply, the Ministers will give flesh to the skeleton and go into all the details, also give specifics in terms of the accomplishments, a review of what was done," Persad-Bissessar added.
Energy Minister Kevin Ramnarine yesterday told the Express measures would be put in place for the increased demand for super gasoline.
According to Ramnarine, as of August 2012, data showed that six per cent of the subsidy was attributable to premium gasoline, 52 per cent to diesel, 41 per cent to super and one per cent to other fuels.
Ramnarine added that some nine per cent of all the fuel consumed in Trinidad and Tobago (volumes) was attributable to premium gasoline. "Information from one new car dealer indicates that five per cent of new vehicles sold are classified as "premium compelled". This means they must use premium gasoline. Information from another new car dealer indicates that three to four per cent of new vehicles must use premium," said Ramnarine.
The Minister explained that the difference between Super RON 92 and Premium RON 95 is the octane rating. "There are many people who have cars that ought to use premium, but they use super. Some people also opt to use super with an additive. It is expected that with the price increase there will be a level of switching from premium to super. This was anticipated.
"With regard to the supply of super gasoline, there is sufficient supply of super gasoline in the country to meet the increase in demand," said Ramnarine.
"Most taxis already use super gasoline or diesel. Most maxi-taxis use diesel. There should therefore be no increase in taxi fares. Most company fleets use diesel to transport goods. As diesel has not been increased, there should be no impact on food prices," he added.
The Finance Ministry, said Ramnarine, has recognised that the subsidy is a serious strain on the nation's finances.
"In fiscal 2012 alone, the subsidy will be around $4.47 billion. You would appreciate that this money could be allocated to build hospitals, schools and roads. The subsidy in fiscal 2012 is actually twice the budgetary allocation to Tobago in fiscal 2013," said Ramnarine.
"The increase in the price of premium is therefore a signal that the Government plans to tackle the subsidy in the medium term. As Minister Howai mentioned in his budget speech, that will be done in a manner that takes into consideration possible impacts on inflation," he added.
The difference between premium gas and super, according to the National Petroleum (NP) website:
The octane requirement of an engine determines the type of fuel to be used. The gasoline fuels marketed by NP are all unleaded, and these are their octane ratings:
Super unleaded: 92 minimum
Premium unleaded: 95 minimum
The owner's manual of every vehicle indicates the minimum octane of the fuel to be used. Here are two scenarios:
A vehicle requiring a fuel octane rating of 91 minimum can safely use super unleaded (92 minimum).
A vehicle requiring a fuel octane rating of 93 minimum needs to use premium unleaded (95 minimum), and not super unleaded.
No special requirements are necessary to switch from premium to super.
In an engine with an octane rating of 92 or less, moving from premium to super should not cause any of the following: damage to the engine, clogging of fuel injectors, increase in vehicle maintenance cost, an abnormal amount of carbon build-up.
If, however, a fuel is used that is lower than the octane rating required by the engine, it will result in "pinging" ("pinking", "metal-on-metal clinking").