Danville Walker, Senior Vice President of WIPL (left) and Opposition Spokesman on Finance Julian Robinson.
Regional energy company, West Indies Petroleum Limited (WIPL) has described as curious and misguided questions asked in Parliament by Opposition Spokesman on Finance Julian Robinson about a Common External Tariff (CET) waiver it was granted.
WIPL said it had to contend with an extended delay before accessing the relief which was automatically granted to a host of international companies which also legally qualified for the exemption.
Robinson used Parliament last week Wednesday to enquire of Finance Minister Dr Nigel Clarke whether WIPL had received a CET waiver and the rationale behind the granting of the relief.
The Opposition Spokesman also demanded disclosure of the value of the waiver in terms of revenues foregone by the Government of Jamaica. Clarke is to respond to the questions at the expiration of 21 days.
WIPL pushed back in a statement to the media on Sunday saying the company finds the enquiry by the Opposition Spokesman “curious and misguided because it is of the view that the pertinent question is “why was WIPL for a protracted period of time denied the waiver when the relief was automatically granted to a range of players in the market”.
Loop News sources said several other major fuel importers, including Petrojam which is owned by the Government of Jamaica, along with at least three privately owned international multi-national corporations are reportedly accessing similar relief. However, WIPL did not reveal which other companies have been granted the CET waiver.
“The fact is despite WIPL – which is a Jamaica-based company owned by Jamaicans – having qualified for the waiver, baseless and legally unsound reasons were put forward to deny the company the relief that was approved for several other companies which also qualified for same,” WIPL explained in its statement which was issued by its Senior Vice President Danville Walker.
WIPL said when the waiver was to be renewed, inexplicably, it had to wait four months while obstacles were placed in its way to deny it the relief that was given to several other international companies.
“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?” the bunkering entity queried in its statement.
“We are also compelled to question why is it that we are being victimised and forced to spend our resources to fight for a level playing field in its own country,” WIPL said.
WIPL said it would be good if Robinson would indicate whether he believes that the CET should be reimposed for all players in the market or the WIPL should continue to be victimised and discriminated against.
The company said the fact is if the CET is reimposed across the board on all importers, then the price at the pumps will increase and in addition, all players would be getting the same treatment in the industry.
WIPL said it insists on a level playing field and further pushed back against Robinson.
According to West Indies Petroleum, Robinson should indicate whether he believes the CET waiver should be applied evenly and fairly, including to Jamaican-based and owned companies, or whether what it described as “an unjust atmosphere of victimisation and discrimination” should be allowed to prevail.
The WIPL said that in the interest of full transparency, it has decided to detail the below chronology of events which includes its appeal of the decision of the Minister of Finance and the Public Service to deny WIPL the waiver. This was done through an appeal of the decision of the minister relying on legal and legitimate grounds, the company said.
On February 1, 2021, WIPL submitted its application for suspension of the Common External in respect of Mogas 84 and 88 to the Ministry of Science, Energy and Technology (MSET).WIPL sought an extension of the tax relief to be granted for the period January 1, 2021, to December 31, 2021.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.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.Subsequent to WIPL submitting its application, the MIIC requested several documents in furtherance of the approval process. WIPL complied with all the requests.On February 2, 2021, WIPL received an email from MIIC which requested that our company complete a Caricom Approved Suspension Form.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 COTED/Secretary General’s Approval.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 having regard to the Caribbean Community law.WIPL was advised for the first time of the reasons for the decision and directed to Appeal to the Minister of Finance & Public Service.
WIPL was forced to engage its legal team to make the appeal to the Ministry of Finance and its portfolio Minister.
Submissions Made by WIPL Concerning Its Qualification for Suspension Of CET
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 Caribbean Community Law.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.WIPL noted that the reasons proffered lack credible basis because the conditions alluded are not consistent with Caribbean Community law and in particular Article 83(2).WIPL also argued that the conditions cited by technocrats for denying it the waiver are ultra vires, arbitrary and discriminatory. WIPL objected to being completely excluded from obtaining a benefit which had been expressly outlined under CARICOM law and is applicable to our company.Our attorney also pointed out that local suppliers of fuel who compete with WIPL currently enjoy the tax relief.The criteria imposed by the Minister of Finance & Public Service, therefore, puts WIPL at a significant disadvantage in the fuel market. We were therefore concerned that the measures may be designed to keep WIPL out of the fuel market.
We also note several additional factors:
The CET on the relevant products was suspended by the Council for Trade and Economic Development (COTED) in 2018.WIPL will never qualify for the suspension of CET if conditions not supported in law which were cited by the Finance Ministry are upheld.WIPL has never been a consistent customer of a regional supplier prior to Petrotrin closing its operations.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.WIPL was approved to buy from Petrotrin in January 2018.It was not until March 2018 that Petrotrin sent WIPL an offer to buy Gasoline and Diesel.During the period of delay, it was only reasonable for WIPL to have sourced its petroleum product from other external sources.By November 2018, Petrotrin closed its business. Given this development, WIPL was not afforded an adequate opportunity to become a consistent customer of Petrotrin;WIPL is not a new company and was not benefitting from a concessional agreement in the past.