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National Gas Company “being protected” from butane importers, charges Opposition

Posted: Friday, December 6, 2019. 2:22 pm CST.

By Aaron Humes: Leader of Opposition Business, Senator Michel Chebat, opened the debate on the Supplies Control (Amendment) Bill 2019 by suggesting that the National Gas Company Limited (NGCL) is the only one benefiting from penalizing the current importers for arbitrarily setting prices below those approved by Government. He noted that the NGCL, too, has a monopoly on the importation and distribution for retail, and is backed by powerful interests.

He questioned, as did his colleagues in the House of Representatives on Wednesday, why Government would not look out for Belizeans anticipating lower prices facilitating greater baking and cooking needs for Christmas.

Later, Dr. Louis Zabaneh spoke of “state capture,”a type of systemic political corruption in which private interests significantly influences a state’s decision-making processes to their advantage.

However, Government Senator Aldo Salazar challenged this. He reminded that since NGCL is not itself participating in retail of liquefied petroleum gas or butane, it does not matter to whom it sells that which it is importing and storing, and added that the importers might not have acted if the company had not been formed.

Salazar directly accused the “monopoly” of importers of “dumping the stock to choke out the retailers,” and the Opposition of having political blinders on. He noted that these retailers are small businesspersons who may be members of the Chamber of Commerce.

Church Senator Ashley Rocke said the timing might not be the best, but there is no doubting the Government’s intentions to support the “small man” and be fair to all.

It was pointed out that Government, after becoming a minority partner in the NGCL reacted to the importers’ “predatory pricing” first by setting the floor, and now increasing the penalties for violations rather than being proactive. The two sides had met in the aftermath of the passing of NGCL legislation in October and further meetings had been planned.

Unions/Civil Society Senator Elena Smith questioned where are the numbers from any survey of retailers concerning their stock and costs, to be sure that they are being priced out of business, and pointed out that there is a Competition Bill in draft form that would address this kind of issue. She added that there is a need for proper consumer protection legislation as well.

Business Senator Mark Lizarraga applauded Government’s standing up for retailers, whom Prime Minister Barrow noted had reached the point of tears as they begged for protection from the long-standing “LPG cartel”, which he said had been allowed to run unchecked.

However, he insisted on being transparent and having a proper formula for wholesale and retail, and of the penalties, “too little, too late, piecemeal not enough, not transparent.” And of monopolies, he added that monopolies seldom guarantee lower prices, abetted by the back and forth between free market and monopolistic policies. The result, he concluded, is the Prime Minister’s declaration of war on Wednesday.

Also, he pointed out that prices at retail can be far lower. The $4.75 set by Government allows for a 44% spread in retail prices, but the importers cream off both wholesale and retail, and this should have been addressed from some time ago, he added.

The formula applied by the Supplies Control Unit, he added, should be legislated and the “padding” removed as the “LPG cartel” is taking one last run at securing that which they had completely controlled.

 

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