Gov't owes Unipet $134 million in VAT, subsidies

Monday, December 9, 2019 - 09:15

The Gov­ern­ment owes Unipet more than $100 mil­lion in un­paid VAT re­funds and gas sub­si­dies.

Guardian Me­dia learned on Sat­ur­day that the Gov­ern­ment's out­stand­ing bill is the crux of Unipet's le­gal case cur­rent­ly build­ing against the State.


Ac­cord­ing to in­for­ma­tion re­ceived by a se­nior Unipet ex­ec­u­tive, the Gov­ern­ment owes the pri­vate com­pa­ny $74.4 mil­lion in gas sub­si­dies and an­oth­er $59.2 mil­lion in VAT (Val­ue Added Tax) re­funds—a to­tal of $133.6 mil­lion.

Guardian Me­dia could not con­firm in what pe­ri­od the Gov­ern­ment racked up that debt.

It was this debt that kept the "good faith" agree­ment and con­tin­ued de­liv­ery of fu­el go­ing be­tween Paria and Unipet for such a long time.

Un­der the gov­ern­ment sub­si­dies, Paria sells to NP and Unipet fu­el at a price. Let’s for sim­plic­i­ty sake say that cost is $100—NP and Unipet can on­ly sell to cus­tomers for $80 be­cause of price con­trol on fu­el. The Gov­ern­ment then pays Unipet and NP the dif­fer­ence of $20 which is called the sub­sidy. Be­cause of the line of cred­it, it is as­sumed that by the time NP and Unipet are re­quired to pay their bills they would have got­ten their sub­sidy to pay the full $100 which would com­prise the $80 they got from the gas sta­tions and the $20 from the Gov­ern­ment.

There­fore, the sub­sidy is re­al­ly for Unipet to pass on to Paria since in ef­fect it is on­ly re­spon­si­ble for the $80 it got for sell­ing the fu­el.

It means if the Gov­ern­ment is late in pay­ing the $20 to Unipet and NP, it can be short on pay­ing Paria.

Last week, dur­ing the im­passe be­tween Paria and Unipet, Fi­nance Min­is­ter Colm Im­bert re­vealed that Unipet had racked up a mas­sive bill with the fu­el trad­ing com­pa­ny.

On Fri­day dur­ing his con­tri­bu­tion to the de­bate on the Fi­nance Bill in the House, Prime Min­is­ter Dr Kei­th Row­ley blast­ed Unipet for the un­paid bill.

Row­ley said then that the Op­po­si­tion was busy try­ing to por­tray Unipet as the vic­tim in­stead of in­sist­ing that the pri­vate com­pa­ny pay off its debt to the State.

Row­ley made no men­tion then of the mon­ey that the State owed the pri­vate com­pa­ny.

He said that there was a sense of en­ti­tle­ment in this coun­try even when a com­pa­ny was be­ing "ridicu­lous and un­pro­duc­tive."

Row­ley said then that it was the tax­pay­ers who had to foot the bill for lawyers be­cause Unipet had filed an in­junc­tion to end the stand­off with Paria.

On Tues­day, Paria stopped its sup­ply of gas from all 24 Unipet gas sta­tions. Since then, there have been long lines at the NP gas sta­tions as the Unipet sup­ply dried up.

Sev­er­al of the Unipet sta­tions re­mained closed on Sat­ur­day.

In a state­ment on Tues­day, Paria said it de­cid­ed to cut off Unipet's fu­el sup­ply be­cause the com­pa­ny failed to rene­go­ti­ate a sup­ply agree­ment since April 2019.

On Thurs­day, Guardian Me­dia spoke ex­clu­sive­ly to both the cur­rent and the for­mer chair­men of Paria and both men con­firmed that there was nev­er any deal be­tween Paria and Unipet, there was on­ly an " agree­ment."

George: Sub­si­dies owed to Unipet is not in con­tention

Cur­rent Paria chair­man New­man George told Guardian Me­dia than that there was an un­signed agree­ment which al­lowed the con­tin­ued sup­ply to Unipet with­out a pay­ment.

That agree­ment would have been put in place when the com­pa­ny be­gan a busi­ness in 2018 un­der for­mer chair­man Wil­fred Es­pinet.

Es­pinet on Thurs­day told Guardian Me­dia that he was not sure what hap­pened be­tween Paria and Unipet but spec­u­lat­ed that the in­voic­es were not paid on the dates that it was due.

Es­pinet did not say whether Unipet ever de­fault­ed pay­ments un­der his watch.

George yes­ter­day con­test­ed Unipet's claims that it is owed a gas sub­sidy.

George, who is out of the coun­try, said that he has not been "fol­low­ing" the is­sue as his WiFi was in­ter­mit­tent.

"I can­not con­firm what VAT re­fund is owed by the Gov­ern­ment to Unipet and that is an is­sue for the Gov­ern­ment and not Paria," he said. "The sub­si­dies owed to Unipet is not in con­tention as that re­fund of the sub­si­dies to Unipet when re­ceived is for­ward­ed to Paria," he said.

He did not re­spond to sub­se­quent ques­tions.

Fi­nance and act­ing En­er­gy Min­is­ter Colm Im­bert did not re­spond to ei­ther calls or texts to his mo­bile phone. Per­ma­nent Sec­re­tary Vish­nu Dhan­paul did not re­spond ei­ther.

 - Renuka Singh