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STATE-OWNED National Petroleum’s entire network of service stations and those that operate under its company-owned, dealer-operated business models, are under threat of being shut down because of a ruling by the High Court in May.
So dire is the court’s declarations that it will have severe consequences on NP’s business operations, in particular 67 of its service stations, it “will affect the travelling public” and compromise TT’s fuel security.
This was stated by NP in support of an application it made to the Court of Appeal for a suspension of the May ruling and declarations of the High Court.
NP said the judge’s declarations have brought into question the legitimacy of the terms and conditions of contractual arrangements of gas stations operated by dealers. NP’s application for the suspension comes up for hearing before an Appeal Court judge this Friday.
In May, Justice Avason Quinlan-Williams ruled on a judicial review claim of the Petroleum Dealers Association (PDA) which challenged a decision by former energy minister Franklin Khan to grant a retail marketing licence for a gas station in Diego Martin to NP.
Quinlan-Williams ruled that Khan’s decision to grant the licence to NP in 2017 was illegal and therefore void.
DEALERS AT RISK
The PDA claimed that Khan was not permitted to grant the licence as he knew that NP did not intend to operate the station itself, as it was to be leased to an operator. The judge held that delegation by the holder of a retail marketing licence was unlawful.
On June 17, NP, which was an interested party in the claim at the High Court, filed a notice of appeal.
In its application, NP warned the immediate and practical effects of Quinlan-Williams’s declarations are that operations at the Diego Martin station and 66 others, which operate under a similar business model, were rendered illegal.
The company also warned that immediate loss of sales volume for each site will result in severe distress and inconvenience to the public.
NP said each dealer at the respective sites would be required to obtain its own retail marketing licence and while they wait on that process, the gas stations will be inoperable, “which will impact the delivery and availability of fuel to the public.”
Disruption in operations will also have a severe financial impact on NP which will affect its ability to continue operations generally, the application further noted.
NP said these operations were not only limited to the supply of fuel to the service stations network but also included the supply of jet fuel, marine fuel, lubricants, LPG (cooking gas), greases and other products.
Closure of these service stations will not only affect the sale of fuel but other businesses with whom NP has commercial partnerships, for quick service, such as fast food restaurants and commercial banks
The company referred to two sites in O’Meara and Preysal which it described as “high-volume sites” which are valuable profit-generating assets.
“Cessation of business operations would result in its market share devolving onto a competitor entity,” the company warned.
NP WARNS OF
DIRE IMPACTS
It also said any adverse impact on the profitability of operations would be detrimental to the shareholder – the corporation sole.
“There will be a resultant loss of revenue to Government not only as the shareholder but in relation to all other taxes and levies which are payable by NP on its revenues.”
The closure of service stations will also result in health, safety and environmental issues, NP warned in its application, and the costs associated with eventually reopening each site will be astronomical.
In justifying its application, NP said these were exceptional circumstances to warrant the suspension of the judge’s orders.
NP’s application said if the court’s ruling was correct – which it contends is not – then NP would have to reconsider its operational business model for its 66 other gas stations which are in the same position as the Diego Martin gas station.
“The corollary is that these other 66 service stations will be functioning illegally.”
The company said it would have been better to make an order that the process of publishing the application for retail marketing licences be repealed to allow for an opportunity for objections to be made instead of voiding them, which it said, has the effect of closing down the service station.
“It is in the public’s interest the declarations be suspended. The grave and serious impact is immediately apparent from the nature of the declarations granted,” NP said. It is urging the Appeal Court to grant the suspension order in the interest of the broader society for “preservation and continuance of a reliable distribution and availability of fuels to the nation.” NP’s team of attorneys is led by Russell Martineau, SC.
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