Reducing the subsidy on diesel would have been more effective than on premium gasoline, Trinidad and Tobago Automotive Dealers Association president Visham Babwah has said.
In a post-budget telephone interview yesterday, Babwah told the Express that the largest chunk of the $4 billion fuel subsidy went towards diesel, so that would have made more sense.
Finance Minister Larry Howai announced yesterday in his maiden budget presentation that effective today the subsidy on premium unleaded gasoline would be reduced.
The new price is $5.75 per litre, a 44 per cent increase over the previous $4 per litre.
According to the Ministry of Energy, the fuel subidy on premium gasoline is $0.73 per litre; for diesel, it is $2.71, and for super gasoline, $1.83.
"This is not really for the poorer people. It's really people like companies and big contractors for their heavy equipment who use diesel," he said, noting many luxury vehicles also came equipped with diesel engines, so the rich were still the ones benefitting.
Babwah said the Association, which focuses on the foreign used car market, had actually been encouraging the importation of premium gasoline engines over any other because of the environmental benefits.
"Now people will switch back to super and negate all those benefits—for the environment, and even for the Government. We will not see the savings (or income) we hoped to achieve," he said.
Babwah said this change would definitely have an impact on the industry, causing a slowdown as people feel the impact of rising fuel prices on their personal budgets.
Foreign used car dealer Inshan Ishmael felt differently about it, however.
He said removing the subsidy on premium fuel has his support since it is about putting the country first.
"I have no problems because my country will benefit from it from added revenue. If it affects the business so be it but at the end of the day country comes before my business," he told the Express.
"It will not have an impact because vehicles are a necessity and not a luxury in this country. The populace has gotten accustomed to not having a mass transit system so people will do what they must to pay the extra if they have to."
—with reporting by Jensen LaVende