Level the playing field

WEST Indies Petroleum Limited (WIPL), the company at the centre of an enquiry from the Opposition spokesman on finance Julian Robinson about the waiver of the common external tariff (CET) on its fuel imports, has provided a scathing response, labelling the inquisition "curious and misguided".

In what WIPL called a detailed response to the questions that were posed in the House of Representatives on Tuesday to Finance Minister Dr Nigel Clarke, the company also called for a level playing field in the petroleum importation market.

"Our company finds the enquiry by the Opposition Spokesman curious and misguided because we are of the view that the pertinent question is why we, for a protracted period of time, were denied the waiver when the relief was automatically granted to a range of players in the market," the company said in a release to the Jamaica Observer on the matter.

"The fact is, despite West Indies Petroleum — a Jamaica-based company owned by Jamaicans — having qualified for the waiver, baseless and legally unsound reasons were put forward to deny our company the relief that was approved for several other companies which also qualified for same."

From left: Stacy Francis, sales manager, Island Lubes; Chad Heins, Castrol's Americas regional sales manager; WIPL Director Tarik Felix; and Ruben Izarra, business development manager, Castrol, prepare to sign an agreement.

The company said, while other petroleum importers received the waiver, when it tried to get a renewal, it had to wait four months to get the relief.

"We are, therefore, compelled to ask: Why is it easy for overseas companies to get every opportunity to do business in Jamaica, but it appears that obstacles are invented and placed in the way of established Jamaican-owned companies?" it asked.

"We are also compelled to [ask the] question: Why are we being victimised and forced to spend our resources to fight for a level playing field in our country? It would be good if the Opposition spokesman would indicate whether he believes that the CET should be reimposed for all players in the market or if WIPL should continue to be victimised and discriminated against?"

It argued that if the CET — a common import tax that is applied equally throughout Caricom — is reimposed across the board on all importers, then the price at the pumps will increase.

An aerial view of tanks at West Indies Petroleum at Port Esquivel, Clarendon.

WIPL also provided a chronology of events, which includes its appeal of the decision to deny it the tax waiver.

1) On February 1, 2021 WIPL submitted its application for suspension of the common external tariff in respect of Mogas 84 and 88 to the Ministry of Science, Energy and Technology (MSET).

2) WIPL sought an extension of the tax relief to be granted for the period January 1, 2021 to December 31, 2021.

3) After submission of the application the Ministry of Industry, Investment and Commerce (MIIC) contacted WIPL and advised it to revise its application in several respects and to direct the revised application to MIIC.

4) On February 2, 2021 WIPL redirected its revised application to the MIIC. The revised application sought a suspension of the Common External Tariff (CET) for the period February 15, 2021 to February 14, 2022.

5) Subsequent to WIPL submitting its application, the MIIC requested several documents in furtherance of the approval process. WIPL complied with all the requests.

6) On February 2, 2021 WIPL received an e-mail from MIIC which requested that our company complete a Caricom-approved suspension form.

7) WIPL complied with the request and submitted the Caricom-approved suspension form. On or about April 7, 2021 WIPL was verbally informed that its request was denied by the Ministry of Finance and Public Service (MoFPS). WIPL did not understand why its application was denied given the Council for Trade and Economic Development (COTED)/secretary general's approval.

8) WIPL, therefore, requested an audience with the MIIC, MSET, and MoFPS in order to be informed of the reason for the decision and press its case with regard to the Caribbean Community law.

9) WIPL was advised for the first time of the reasons for the decision and directed to appeal to the minister of finance and public service.

WIPL was forced to engage its legal team to make the appeal to the Ministry of Finance and its portfolio minister.

WALKER... known for his adept negotiating skills.

WIPL also provided submissions that were made concerning its qualification for suspension of CET

1) WIPL noted that it has complied with the procedure required for the application for the suspension/waiver of the CET, which includes the procedure set out in Caricom law.

2) WIPL also challenged the reasons for the decision to deny it the waiver which was that (a) the applicant must have been a consistent customer of a regional supplier prior to Petrotrin closing its operation, or (b) the applicant is new, or (c) the applicant was benefiting from a concessional arrangement in the past.

3) WIPL noted that the reasons proffered lack credible basis because the conditions alluded to are not consistent with Caricom law and, in particular, Article 83(2).

4) WIPL also argued that the conditions cited by technocrats for denying it the waiver are ultra vires, arbitrary, and discriminatory. It objected to being completely excluded from obtaining a benefit which had been expressly outlined under Caricom law and is applicable to the company.

5) WIPL noted that their attorney also pointed out that local suppliers of fuel who compete with it currently enjoy the tax relief.

6) WIPL argued that the criteria imposed by the minister of finance and the public service puts it at a significant disadvantage in the fuel market, and is, therefore, concerned that the measures may be designed to keep WIPL out of the fuel market.

WIPL said it also noted several additional factors:

a) The CET on the relevant products was suspended by COTED in 2018.

b) WIPL will never qualify for the suspension of CET if conditions not supported in law, which were cited by the finance ministry, are upheld.

c) WIPL has never been a consistent customer of a regional supplier prior to Petrotrin closing its operations.

d) In 2016, WIPL applied to be registered as a Petrotrin customer. It took a period of two years for the approval to be processed and granted.

e) WIPL was approved to buy from Petrotrin in January 2018.

f) It was not until March 2018 that Petrotrin sent WIPL an offer to buy gasoline and diesel.

g) During the period of delay, it was only reasonable for WIPL to have sourced its petroleum product from other external sources.

h) By November 2018 Petrotrin closed its business. Given this development, WIPL was not afforded an adequate opportunity to become a consistent customer of Petrotrin

i) WIPL is not a new company and was not benefiting from a concessional agreement in the past.

The company added that, on the basis of what has transpired, it believes that it is just and fair that the decision to deny it the waiver be reversed. It said legal advice received is that the decision of the Ministry of Finance is inconsistent with Caricom law since it complied with the procedures outlined and qualified for the CET suspension/waiver and was granted approval by COTED as required via the appropriate authority.

"Our attorney had also pointed out in clear terms that the decision to deny us the waiver should be revisited and that we urge that a decision be arrived at in reasonable time so that, if adverse to us, we would be given time to appeal, as necessary, to the Caribbean Court of Justice for relief," it concluded.

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