LPG importation issue prompts meeting with PM and Butane Gas Company representatives
Saturday, October 5th, 2019
Butane company representatives met with Prime Minister Right Honourable Dean Barrow on Wednesday, October 2nd, to discuss the creation of the Belize Gas Company, which will be the only authorized entity to import butane into the country. On August 16, 2019, the House of Representatives passed the Liquefied Petroleum Gas Bill. The new legislation established the Belize Gas Company, which is taking over the business from three suppliers (Western Energy Limited, Gas Tomza, and Southern Choice Butane-Zeta Gas) owned by a Mexican investor. This move by the government was not well received among the current suppliers and members of the Opposition of the People’s United Party (PUP), who characterized it as monopoly on the LPG market. The government has a different view, and according to them, it is a viable alternative to supply butane at lower rates and even better quality to consumers.
The meeting took place at the Prime Minister’s office in Belize City and lasted over an hour. After the gathering, both Barrow and the butane suppliers spoke to the media, saying that that it was productive. Barrow explained that while the National Gas Company will act as the exclusive importer and wholesaler for butane, it will not transport it. “In effect we are inviting people to bid,” he said. Barrow stated that the aim is to get companies to transport the LPG for distribution at a possible cheaper price. “We want to be sure that the price of the LPG at landing is going to be cheaper than the price at which currently the operators are bringing it in,” said Barrow. The representatives of the butane companies have been invited to place bids so they can transport it. Barrow added that because they will be importing the gas, they will be able to monitor and test it and detect any blending or dilution in the product. He considers this advantageous for the consumer, who are expected to get lower prices and better-quality butane.
Speaking on behalf of the butane companies was Ernesto Uh, who did not reveal much of what they discussed with the Prime Minister. He briefly said that there would be further meetings to discuss their concerns as the process progresses. One of the main concerns that have been brought up is that by losing the right to import the LPG, it can jeopardize hundreds of employees working for them. They look forward to another productive meeting in the upcoming weeks that can satisfactorily address this concern. They also indicated they have invested millions of dollars in the local economy and believe in fair competition.
The Bill passed in August gave Belize Gas Company its legal status, and was dubbed by the PUP as a form of monopoly by the current administration. The government has explained that the only monopoly will be the importation of butane and that the situation is like the current one in which a foreign investor controls the market. According to Barrow, Belize Gas Company is a public/private company in which the government has 25% of the shares for licensing the deal and provide exclusivity, while the principals will be mainly Belizeans. Barrow added that the creation of this local company is in the national interest of the consumers.
The Belize Gas Company will initially be allowed to import butane for the next 15 years. The company will count on three facilities across the country for the distribution of the LPG.
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