Government of Saint Lucia

Go to Homepage


[Site Map]

[Contact Us]

Search this Site

Oil and Prices - October 18, 2004

horizontal rule

Governor General
Prime Minister
The Cabinet
The Senate
House of Assembly
Overseas Missions
The Constitution
The Staff Orders

National Television Network
Watch NTN Live

Saint Lucia Gazette
Press Releases
About Saint Lucia
Frequently Asked Questions
Web Links
Government Directory
Browse by Agency
Site Help

Oil and Prices


Hello St. Lucia,

Here we are once again, with each other.

At a recent Constituency Conference of the St. Lucia Labour Party, I was asked by the calypsonian, Reality, what was my vision about prices in St. Lucia. You may remember Reality’s highly unusual calypso, “Eyes in Their Backside”. Reality was invited to sing his song at the Conference. He wanted to know what the Government intended to do about “rising prices.” Reality wasn’t the only person with prices on his mind, because the conference hall went quiet after the question was posed. People wanted to know.


I explained to Reality and the conference delegates that the prices of some basic items had not increased since 1997, when we entered Government. These include the prices of sugar, flour and rice.

The Minister of Commerce, who was present at the conference, also pointed out that there are still some basic commodities under price control. Price control helps to discourage profiteering at the expense of the consumer.


I also pointed out that there are other items – such as cement, plywood and steel – the prices of which had gone up, but over which government had absolutely no control. Importers had no control over the prices they paid to suppliers of these items. I pointed out that the cost of steel had gone up because China was purchasing all the available steel in the world to finance its construction boom. I also explained that the cost of cement and plywood had gone up because manufacturers charged more to produce and transport these items to St. Lucia.

Some people are puzzled that prices increase even when some goods are under price control. Why is that so?

Let me explain. Price Control seeks to prevent “profiteering” by establishing a percentage mark-up for goods. In other words, Government will say “you can only charge the customer a mark-up of 10%, 15% or 20%.” However, the price the importer pays for the goods may actually increase, as is happening now. So, while the mark-up remains constant, the basic price paid to the suppliers for the item may actually increase. The result is increased prices at the stores or supermarkets, as may be the case.

Likewise, the Government does not have to increase duties or taxes for prices to rise. Taxes on goods may remain the same, but the base price for the goods we import from overseas may actually increase, as has happened now because of the increases in the price of fuel.


I recall just the other day, when Minister of Commerce, Philip J. Pierre, exchanged several letters with the leader of a new political group on this same issue of prices.

In his series of letters, which were carried in successive issues of the Voice newspaper, Minister Pierre responded to claims that supermarket prices were increasing as though they were out of control. The accuser couldn’t exactly identify what items had gone up and by how much. Even the examples he used – crackers and apples -- turned out to be flawed. The Minister pointed out that in the case of crackers, the increase was not as high as the accuser claimed it to be; and in the case of apples, he was as surprised as I was, that such an item was being used to make an argument about price increases.

As for supermarket prices… The supermarkets have themselves explained how they too have to pay for goods at prices that have been increased. Since most of what they sell is imported, the cost of freight has also increased for them.


The price of fuel is the single biggest factor that explains the recent increases in the price of some commodities. When the price of fuel goes up on the world market, the result everywhere else is the same: the cost of fuel-related products, of manufacturing, and the cost of everything else that depends on energy increases. So too does the cost of transporting the goods, whether by air freight or by ships.

Any sizeable increase in the world marker price for oil will automatically have a multiplier effect on every country that does not produce oil – especially small countries like ours. But it is not only small countries that feel the effect of increased oil prices. Large countries feel it too. Likewise, it is not only companies in small islands like St. Lucia that have to face the effects of the increased costs that result from increases in world oil prices. Huge Multinational companies also feel the pinch.

Take the US airline industry, for example. Large airlines are either going belly-up or seriously cutting back on operations. Thousands of workers in the airline industry have lost their jobs because of these adjustments. Other airlines have sharply increased the price of airline tickets or cut staff. These airlines simply cannot keep up with the increases in the cost of their operations sparked by the increases in the price of oil.

It is precisely because of the effect of these oil price increases that we continue to worry about the resulting cost of fuel for us in St. Lucia. Indeed, this matter occupies the mind of every single OECS and CARICOM Government Leader. We are as concerned now as we were back in June when I made an official statement in the House of Assembly about the unavoidable increase in the price of fuel locally.


The cost of oil on the world market last week was way over the troublesome US $50 per barrel mark. Those of you who have been watching, listening to or reading the news would have realized that every time the price of oil hits that fifty-dollar mark, the markets begin to tremble. That was the case for most of last week. If it continues to increase – and if it passes the 60-dollar mark and reaches the 70-dollar mark as analysts predict, then Lord Help Us!

So we have to keep our eyes on the market prices and pray that this is just another of the fluctuations. But if the price of oil remains where it is or keeps going up, we can certainly expect collapses worldwide.


But it is good that people like Reality have the will to ask questions about prices. All citizens must be vigilant about prices. We must not tolerate unfair practices, whether in respect of prices or in the quality of goods we purchase. That is why we believe it is vital to empower consumers.

One of the first things we did when establishing the new Ministry of Commerce was to also ensure that we gave Consumer Affairs more attention. Thus, we introduced a Consumer Affairs Department that has been able to respond to complaints by consumers, including unfair practices and “price gouging”.

It is also with concern about the quality of what we buy that we also strengthened the Standards Bureau, which (incidentally) moved into its own new headquarters at the Bisee Industrial Site last week.

Another positive thing that has happened for consumer protection was the establishment of the National Consumers Association (NCA), a non-governmental body, to promote the rights of consumers. This organization has already done an excellent job in promoting the rights of consumers.


The complaints and explanations in the recent public discussion regarding supermarket prices have also resulted in positive responses from the supermarkets. The biggest chain, Consolidated Foods, has acknowledged the existence of discrepancies between the real prices of some items and what appears on their labels. As a result, the company has announced that it will voluntarily institute new measures to allow customers who so desire to determine and ensure what the actual price of each item is before getting to the cashier.

To ensure their profits, businesses have always passed the increased cost of goods on to the consumer. It has always been that way because that is a basic law of business. But while it is fair to criticize the businesses when they engage in unfair and exploitative practices – and some do -- they must also be praised when they show they are willing to take steps to address the concerns of their customers. Thus, in the same way that we feel free to express concern about the monopoly that Consolidated Foods has on the importation, distribution and sale of basic items, we should also offer a positive note when it displays a sense of corporate responsibility to its customers.


Now, back to Reality – in every sense of the word! Despite recent increases on some items, St. Lucia remains highly competitive.

As I told Reality: Take a look around. There must be a reason why people from other islands are coming to St. Lucia to shop – and not only for clothing, but also for other items. Go to any of the clothing stores such as Hobie and Taxi, the T-shirt vending outlets in the tourism belt, or even the Sea Island Cotton Shop and you will find Bajans, Venezuelans and others shopping here. Why? It is because our prices are better and more attractive than prices for similar items in the other islands.

And for that, even our critics must credit the policies of this government.


Until next Monday, God willing, keep well. And don’t forget to take part in our cultural heritage activities throughout what’s left of this month. Vive La Marguerite!


horizontal rule

Home ] Up ] Office of the Prime Minister Site Map ] [Site Help]

© 2012 Government Information Service. All rights reserved.

Read our privacy guidelines.