FORMER energy minister Kevin Ramnarine agrees that TT must eventually remove billion-dollar subsidies on water, electricity and fuel, but not now.

He said this year may not be the right time to take that action, in light of the ongoing economic challenges posed by the pandemic. Finance Minister Colm Imbert will in July, introduce a finance bill to Parliament to liberalise the local fuel market which will see an end to decades-old subsidies on transport fuel.

Responding to comments on subsidies being phased out, after Imbert held a news conference on Tuesday, Ramnarine said, "It is well known that these subsidies on water, electricity and fuel are not sustainable and will eventually have to be phased out."

"The subsidy on electricity is a burden on the NGC (National Gas Company) not directly on the Treasury. TTEC has not had a rate increase since around 2009." Ramnarine said that situation cannot be sustainable for TTEC.

"Something has to be done but the question is the timing of that intervention. It is obvious that 2021 is not a year to adjust electricity, water and fuel prices."

He said if the subsidy on fuel is removed at current international oil prices "the diesel price at the pump will rise by 43 per cent." Ramnarine said the concern here is that diesel is the fuel most commonly used for commercial transport in TT.

"It means a natural inflationary ripple effect would set in. The population is already buckling under the pressure of the economic impact of covid19 which was preceded by four years of economic contraction."

Ramnarine said both of these situations have left people economically fatigued.

"The unfortunate thing is we have little or no data on 2020 to give an idea of how the population has been impacted." Ramnarine said he was unaware of former State oil company Petrotrin being subsidised to the tune of $2 billion annually, as claimed by Imbert, and he asked the minister to provide that information.

"The economy is headed for the perfect storm and the Government is hoping to bat out the innings because of rising oil prices and rising natural gas prices, but the production of both oil and natural gas is very low."

While he was confident there would be some increase in natural gas and oil production in 2022, Ramnarine did not know whether the revenue from that production would be sufficient and sustainable to close the gap between revenue and expenditure, that Government is trying to do.