Government announces revenue freeze to keep fuel prices stable
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Government announces revenue freeze to keep fuel prices stable |
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Contact: Shannon Lebourne
Wednesday 11 May 2011 – In an effort to cushion the impact of escalating oil prices on consumers, the government of Saint Lucia has decided to cut back on state revenue which is collected on the sale of every gallon of fuel in the form of an excise tax.
The reduction in the tax on gasoline represents a cut of approximately 36.67% from $EC3 to $EC1.90 and the duty on the gasoline prices was reduced from $EC3 to $EC2.53a reduction of approximately 15.67%.
Speaking in an official address to the nation on the issue of fuel prices which was broadcast on local media on Wednesday May 11, Prime Minister and Minister for Finance Honourable Stephenson King, explained that the decision to reduce the excise duty is based on government`s responsibility and commitment to protect local consumers despite international pressures.
“The decision to keep the retail prices of gasoline and diesel unchanged was taken despite the continuous increases in the import price of fuel for the 4-week period of March 28 to April 22, 2011, which would have determined the price change on May 9, 2011. During that period, the imported prices of gasoline and diesel increased by 13.4 percent and 4.6 percent respectively. However Government has decided to absorb the increases by reducing its tax revenue. The public should note that without the reduction in the excise tax, the retail price of gasoline would have increased to $16.48 a gallon and diesel to $16.04 a gallon. It should be further noted that the prices in some other Caribbean countries are even higher than the prices that would have prevailed in Saint Lucia had the Government not intervened”.
The reductions in the excise duty essentially means that the prices of gasoline and diesel remain unchanged at $15.38 and $15.57 a gallon respectively.
Prime Minister King says the reduction will remain in effect for one month and will be reviewed each month thereafter.
“We have taken these steps out of concern over the adverse impact of rising fuel prices on consumers in general, on the productive sectors of the economy and on the poor and vulnerable. Reductions in world oil prices in the last few days are encouraging. They will influence fuel prices and together with other developments that may arise, will be passed on to consumers in subsequent periods. Government will continue to monitor closely developments in international oil prices with a view to initiating the appropriate responses. Based on the pass-through mechanism, prices will be reviewed for the next adjustment date of Monday June 6, 2011”.
The temporary reduction in the excise tax on fuel comes on the heels of a decision by government to increase the subsidy on the 20-pound cylinder of LPG cooking gas, by $5 to a total subsidy of $15. Notwithstanding encouraging signs of reductions in global oil prices in the last few days the Prime Minister urges Saint Lucians to employ all possible measures to conserve fuel, in order to limit the adverse effects of higher prices on one's personal budget, and on the national import bill. |
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