Government Owes WIOC $15 Million After Six Months of Fuel Subsidies

The Government now owes the West Indies Oil Company approximately $15 million after subsidising gasoline and diesel for the past six months to shield motorists from the full impact of rising international fuel costs.

WIOC General Manager Gregory Georges disclosed the extent of the liability during an interview with ABS this week, explaining that the subsidy kept prices at the pumps below the actual cost of the products.

The Government has since announced a two-dollar increase on each gallon of gasoline and diesel, passing some of the higher costs on to motorists while reducing the level of the subsidy.

Georges said the increase will give the Government greater room to collect consumption tax and begin easing the financial pressure created by the subsidy.

Despite the adjustment, he stressed that the Government continues to subsidise fuel.

“Even at $16.50, and even at $16, the Government is still subsidising the product, except at a lesser amount,” Georges said.

The disclosure follows recent industrial action by some gas station operators, who temporarily closed their businesses while demanding an increase in their profit margins.

The closures caused widespread disruption, with long lines forming at the limited number of stations that remained open as motorists rushed to purchase fuel. Most stations later reopened following several hours of industrial action.

The operators’ demands came as the Government was already facing mounting costs from its fuel subsidy programme. Prime Minister Gaston Browne criticised the timing of the action, arguing that international fuel prices were rising while the Government had reduced its own margin to help protect consumers.

Georges said WIOC cannot allow its obligations to suppliers to continue increasing indefinitely.

“All we can do on our end is manage it as carefully as we can,” he said.

WIOC currently receives its petroleum products through a contracted supplier in the United States, with fuel lifted from the U.S. Gulf. The company has not imported fuel from Venezuela since March 2018, when it purchased a small quantity of jet fuel.

Georges said geopolitical disruptions, including tensions affecting the Strait of Hormuz, have added further pressure to global petroleum prices. Shipping and insurance costs have also increased.

He explained that petroleum products which might ordinarily be sourced from the Gulf for European markets are now increasingly being supplied from the United States, creating greater competition for fuel originating from the U.S. Gulf.

The Government is a significant shareholder in WIOC and therefore has a direct financial interest in the company’s financial stability and performance.