The fuel industry is regulated and companies that  operate within it must do so on fixed margins set by  government legislation. The margins under which  the industry operates are very narrow and since  the 2015 budget increases to the Green Fund and  Business Levy, the margins have further eroded,  making the industry uncompetitive. In particular,  the peddler industry is hurting from the stifled  margins which have not been equally adjusted to  ensure profitability.  

If you are looking out of the window while in  traffic, you will notice tankers carrying fuel. What  you probably don’t know is that these tankers also  supply fuel to commercial customers, and this is  known as peddling.  

The official name for the tanker is a Road  Tanker Wagon (RTW). If ever these RTW’s  stopped delivering fuel, the entire country will  feel the effects. This industry plays a vital role in  keeping the Trinidad and Tobago economy going.  Without them supplying fuel on a scheduled basis,  hospitals, transportation, sanitation and energy  support companies will become idle, unable to  manufacture or produce anything.  

One supplier worked out that for every $100  of product he sells, he is only allowed to retain  $4 from which he still has to pay Business and  Green Fund Levy before he can pay his drivers and  lorry men, maintain and purchase trucks, ensure  compliance with health, safety and environment  (HSE) and other standards, keep his premises tidy  and safe and a range of other activities which are  necessary to keep the fuel flowing.  

To be a peddler in a modern environment,  requires significant investment which begins  with ensuring that the RTWs are all maintained  according to the highest standards. The typical  peddling RTW carries 4,000 gallons of fuel  and requires compliance with the highest  safety standards. In order to satisfy the OSH  requirements, fuel compartments and metres  must be calibrated, wagons must be frequently  inspected, drivers must be frequently trained and  tested and storage facilities must be safe. Each  of these activities has a cost attached and that’s  where the peddlers are feeling the pressure.  These factors continue to climb and contribute to  continuous cash erosion of the businesses.  

This industry has been struggling for a long  time and the owners have been operating at a loss  or even using retained earnings to subsidise their  losses. This has become even more challenging  over the past six months with the recent increase  in the Green Fund and Business Levy by 200%.  Under normal circumstances, businesses are  able to simply pass on increased taxes to the  consumer but this industry is different because the  government decides the retail price and the cost.  

An unintended consequence of this increase  by the government is that some peddlers will go  out of business. The only solution to keep RTWs  on the road and avoid social collapse is for the  Ministry of Energy and Energy Industries to  revise the margins being applied to this industry.  A decent return on investment is their basic  requirement.