This Unipet v Paria saga turning out to be just like a telenovela, which is a Latin American soap opera. Telenovelas take the ridiculous-ity to another level, not on the level of Indian soaps where the average police officer have powers like he from the planet Krypton.
Let’s recap our story so far. Last week Paria cut off supply to Unipet owned gas stations because it said Unipet owes them over $100 million for fuel supplied and not paid for. Unipet has since come out and said that the government owes them at total of $134 million in VAT refund and subsidy payments and has since taken the State to court.
In my opinion, both parties are being disingenuous. Absent a formal netting agreement Unipet can’t just decide to not pay for goods received because it is owed money. The government owes VAT refunds to lots of other companies hence the plan in the budget to issue VAT bonds to these companies. Could those companies unilaterally decide we will just net off our future VAT and corporation tax payments against what we’re owed? Well they can but they run the risk of their directors ending up in blue denim sharing a 10′ x 10′ room with 30 other “innocent” men with a pigtail bucket in the corner.
Paria says that payments owed to Unipet by the government has nothing to do with them. Well….that’s more a case of form over substance. Legally you’re a separate company but your only shareholder is the government. The other competitor against Unipet in this fuel distribution duopoly is NP whose only shareholder is also the government. So yeah nobody with sense buying that argument.
Unipet is also upset at the level of support Paria and by extension the government is giving to NP. This is ridiculous to me because everyone knows that family price and terms are usually different from those to a total stranger, or should be. In some families you might get charged more and on worse terms for being related to the owners. Does Unipet feel the doubles lady brother paying the same price for doubles as the regualr man on the street? Tyrone could walk into the parlor down the street by me and take two Chubby out his uncle fridge without paying but let me try that nah.
According to the papers, Unipet has also disclosed that Paria changed the credit terms in May which has shortened the time frame for payment from the 25th of the month to the 10th. I feel Unipet’s pain here. If you living month to month and have to earn the money for 24 days to make the payment in the 25th then someone saying they want payment on the 10th is a problem. Except that companies usually have working capital facilites to manage these timing differences. Then again when margins are thinner than Calista Flockhart maintaining working capital is harder than Daniel Craig pan.
Unipet is also requesting to be granted a licence to import fuel. I’m not sure what the logic is here. What price are they going to charge at the pump after they import the fuel and pay world prices including all the logistics charges? If they have to charge the fixed price set by the government and await a subsidy payment then they’re right back where they started. Maybe Unipet has figured out a way to source fuel cheaper internationally and even at the fixed retail price could turn a profit while also being in charge of their own supply. Or maybe they’re hoping that the government will accelerate the complete removal of the fuel subsidy and then the price at the pump will reflect international prices and they’ll be free to set their own margins. I for one have no clue.
So the saga continues. Will Unipet pay their arrears and get back supply from Paria? Will the government pay Unipet the money owed? Will Unipet be allowed to import fuel? Will Crystal tell Junior that the child he mining for 12 years is not his own, which he should have known because it resembles Vikash from the Tunapuna market? I don’t know about you but I’m staying tuned.