Officials say sale by Trinidad company could affect local cooking gas price
Barbadians could soon be paying significantly more for Liquefied Petroleum Gas (LPG), commonly referred to as cooking gas.
This is because the National Gas Company of Trinidad & Tobago (NGC), through its subsidiary Phoenix Park Gas Processors Ltd (PPGPL), has decided after about 23 years of supplying the Eastern Caribbean with LPG, to sell most of its production to Trafigura B.V.
Reliable industry sources, speaking to Barbados TODAY on condition of anonymity, confirmed that the Trinidad-based company had decided to sell its production, and that “a large contract” has been awarded to the international commodity trading firm Trafigura. A second one could be awarded as early as next week.
“I can confirm to you that PPGPL has changed the process to offer the supplies of Propane and Butane from their processing plant in Trinidad,” said the source who is close to the transaction.
“The effect of this and the concern of them awarding a large tender to Trafigura is that as a result the prices for LPG in the region will go up and for those people who were buying directly from PPGPL, who are now facing the reality of either now buying from Trafigura or bringing product from other sources, this will result in a very significant increase in the cost of LPG to consumers . . . It was a very large contract that was awarded to Trafigura earlier this year. A second one is still in the process and PPGPL has not yet decided how to award that tender,” the source added.
Noting that LPG was an essential commodity for the region, the industry player said it could also affect businesses that were involved in the trading of the gas.
“LPG is regulated throughout the region and it means that the regulated prices will have to reflect the increases in acquisition cost . . . there is a new tender out there that has not been awarded. Once that tender is awarded by PPGPL we intend to inform the government of the impact that this is going to have on the increase prices of LPG throughout the region,” said the industry consultant.
Another source, with intimate knowledge of the contract, has expressed concern that should Trafigura be given all the contracts the situation could prove “catastrophic for the cooking gas market in the region as this would make cooking with LPG comparable with cooking with electricity.”
The industry player explained: “Phoenix Park has one last outstanding [request for proposal] for the supply of LPG, which should have been awarded on July 1, 2014 for first deliveries of LPG October 1, 2014. The award of the [request for proposal] have been further delayed but should be awarded by the end of this month,” the source said warning that “if Trafigura B.V. wins this product they could hold the Eastern Caribbean to ransom or they could have other plans for this LPG that do not include the Eastern Caribbean.
“Under either scenario the Eastern Caribbean might not get LPG from Trinidad,” the source said.
In Barbados Rubis and Sol are the two major suppliers of LPG.
Operators of Rubis declined to comment on the matter while up to the time of publication this newspaper did not get a response from Sol.