By Al Edwards, Business Co-ordinatorIN HIS bid to obtain advantageous terms for the purchase of fuel and in particular, Liquified Natural Gas (LNG), Ambassador Anthony Hylton, the Government's energy advisor, is calling on Trinidad & Tobago, CARICOM's largest supplier of LNG, to sell at reduced prices in accordance with agreements reached with the CARICOM's Single Market Economy (CSME).
Speaking to Wednesday Business earlier this week, Ambassador Hylton said: "The price of electricity in Trinidad is approximately 4 cents per kilowatt. In Jamaica it is anywhere between 11 to 13 cents cents per kilowatt depending on prevailing world oil prices so there is a substantial differential in price.
"On that basis our manufacturing sector is at a distinct disadvantage and then we are asked to compete with Trinidad within the Caribbean single market and with third countries.
"Even as we negotiate a trade agreement with Costa Rica, only Trinidadian manufacturers will be able to take advantage of this trade agreement fully, given its pricing advantage. Our manufacturers are concerned about those agreements because they can 't compete effectively in the single market particularly with Trinidad with its pricing advantage. Nor can we do so with Costa Rica and the other market openings taking place.
"No country is interested in Trinidad's 1.2 million people as a market- they are interested in CARICOM's 16 million. When we enter into treaty negotiations with other countries outside the CARICOM region it is our market that we are bringing to the table in those negotiations- all of our markets collectively.
"We are saying energy, while it is not the only issue that is the determinant of cost, it is a significant part of our production costs, in some instances well over 20 percent."
As far as a regional energy policy is concerned, Ambassador Hylton points to a regional trade policy contained in the revised Treaty of Chaguaramas providing for National Treatment in the supply and prices of goods and services within the single market. He regards this requirement for National Treatment within the single market as a fundamental principle which underpins the construction of a single economic space which is the objective of the CSME.
Addressing a Caribbean conference on Petroleum Product Pricing in the CARICOM region last month, Ambassador Hylton put Jamaica's position firmly on the table: The principle of National Treatment operates as our equal protection clause in the context of our existing political and economic arrangements as it allows for meaningful competition between regional entities of both supplier and consumer countries.
"Although we recognise the need for a regional energy policy and strategy in order to work through the issues of supplies, investments, transport and pricing etc., any such policy must accord to and be coherent with the fundamental requirement of National Treatment of entities throughout the CSME.
"The essential issues therefore are the following: is there differential pricing of energy and energy products as between domestic consumers in Trinidad & Tobago and other CARICOM consumers. A related issue is whether the export-pricing basis is discriminatory or not? Our preliminary impression is that they are!"
However, the Prime Minister of Trinidad & Tobago Patrick Manning poured scorn on this idea saying countries like Jamaica did not full understand how the international industry works. Addressing a Cabinet meeting two weeks ago he said: "If a CARICOM country would like to purchase LNG from Trinidad & Tobago we are more than interested in selling LNG to that country. What is meant by under the CARICOM Single Market Economy, I don't know.
"What we are saying is that our colleagues need to understand the industry more and then things will be much easier. The industry and the structure of the industry is not understood and a number of the countries have been labouring under misconceptions."
For more on the cost of purchasing LNG from Trinidad, see this Friday's Financial Gleaner.
