Petrotrin Severance to Cost at Least $1 Bln

(Trinidad and Tobago Newsday, Carla Bridglal, 31.Aug.2018) — Severance packages for Petrotrin workers will cost upwards of $1 billion, Energy Minister Franklin Khan estimated yesterday. But compared to the Pointe-a-Pierre refinery’s annual loss—estimated at $2 billion—that’s a small price to pay.

Khan said the company was still “crunching the numbers” but will offer early retirement for people over 55, as well as “exit packages” for young workers.

“That formula is still being worked out. The figure will be huge because the base salary at Petrotrin is big.”

While the wages at the refinery aren’t necessarily the highest in the company, he said that department did have the highest overtime bill, but overtime doesn’t come into play in the determination.

Khan acknowledged the human impact of the 101-year-old refinery’s closure, saying as a former employee, he empathised with them.

“The numbers did not stack up, otherwise we would have put the economy at risk. Having said that, no matter what spin you put on it there are approximately 3,000 families affected. I am very much conscious of it, and so is the Prime Minister. My entire career was at Petrotrin. I know most of those workers. I supervised some of them. I have a great deal of empathy for them. That is why we would be working out proper packages. We want a spin-off effect like what happened in Couva and Chaguanas after Caroni (1975) Ltd closed down.” Even if the refinery is closed, there will still be lots of activity in the exploration and production side. “I’m not too concerned about La Brea, Santa Flora and Point Fortin. The South Western peninsula is good. The major challenges are the communities of Marabella and Gasparillo, the catchment areas for the refinery.”

The refinery will initially be transformed into a terminalling facility to import fuel in bulk for onward shipping to the Caricom market.

Khan added that even though the company will have to now import fuel, there will be no change to the fuel subsidy. The fuel subsidy is estimated to be $900 million this fiscal year. There’s also a subsidy on liquefied petroleum gas (LPG) or cooking gas, for about $500 million. Petrotrin absorbs the LPG subsidy, but state-owned fuel distributor, National Petroleum, absorbs the fuel subsidy, so the change at Petrotrin will not impact the current subsidy model.

Khan also defended the government’s reticence to publicly comment on the decision to close the refinery. Dr Rowley is expected to address the nation on Sunday. “The announcement was made by the board of directors. Everybody in this country says it’s political interference that killed Petrotrin, so we empowered the board. We gave them the autonomy to act. They made a proposal, it was approved by Cabinet. We don’t have to be on a ball-by-ball commentary in that regard because the very thing the population is accusing the politicians of is what you are asking me to do.”

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