Is King stuck between a rock and a harder place?

Prime Minister Stephenson King

Leader of the Opposition Kenny Anthony in an address to Micoud on Sunday described as “extortion” the tax the present United Workers Party government has on fuel.
“When you vote back the Labour Party into office one of the first things that will happen is a change in policy on gas prices,” said Dr Anthony to elated screams from the crowd. “We are going to reduce the tax that the government puts on the gas prices. Three dollars is too high, it is extortion, it is robbery!”
What Dr Anthony did not tell his crowd of supporters however was how much less tax would his government put on fuel. He also did not tell them that under the last Labour administration the government had been using millions of taxpayers dollars in order to subsidize the price of gas.
On Monday this week it was announced by the Ministry of Commerce, Industry and Consumer Affairs that petroleum prices would rise once again.
The changes in international oil prices, caused by the instability of the Middle East were as follows:
Gasoline from $14.24 per imperial gallon ($3.13 per litre) to $15.38 per imperial gallon ($3.382); Diesel from $14.68 per imperial gallon ($3.23 per litre) to $15.57 per imperial gallon ($3.424); 20 pound (9.07 kg)LPG from $39.66 per cylinder to $43.16 per cylinder. 100 pound (45.36 kg) LPG from $248.32 per cylinder to $265.81 per cylinder. The Ministry also advised that that the retail price of kerosene remains at $6.00 per imperial gallon ($1.32 per litre).
The ministry stated that retail prices will next be adjusted on May 9, 2011. The release ended by stating that the Prime Minister and Minister for Finance Stephenson King “will make a policy statement on the issue of rising fuel prices in his budget address later this week.”
But what can the government do about rising fuel prices?
Speaking with the STAR yesterday petroleum dealer and Senator Everistus JnMarie admitted that he was part of the call to get the government to have the price of fuel reflect the world price of oil.
“During the Labour Party administration the policy was to keep prices stable and in so doing they found themselves subsidizing fuel. They were literally paying money to the importers of fuel to keep the prices at the pumps stable. That policy went on for quite some time and it was running into the government paying several millions of dollars to the importers. The situation was just not tenable. As it turned out you had a change of administration who had to review the situation and before long they adopted the pass through mechanism.
“It was my personal opinion that this system should be adopted,” he said. “The reason being that I think the average consumer should not be completely spared of the reality of economic life.”
JnMarie explained that despite this he believes now the government should act.
“Right now we have an unprecedented situation of rising prices every month. I am asking that the government give the consumer a reprieve over a period of time to at least allow them to enjoy some of the benefits of the savings from changes in buying patterns.
“If you don’t do that any initiative taken by a consumer to combat the rising prices will not be realised because it will be consumed by the next price increase. All I am asking for is some stability so consumers can see there are benefits and savings to be made from changing their buying patterns.”
JnMarie suggested that the government keep prices stable for three to four months.
“Or you could come to a compromise and say you would not have an increase in excess of 50 cents on a gallon. From a business standpoint you need to have some level of predictability about how your energy costs are moving. So you cannot plan your business in an environment when you have prices changing unpredictably. It is not good for government, the consumer of for business.”
JnMarie reminded the STAR that government was subsidizing the 20 pound gas cylinder.
He said: “Without the government subsidy the price of 20 pound cylinder instead of being $43.16  would have been $53.16. It is being subsidized at $10 per cylinder.”
On Thursday the country will find out finally what the position of the government is on this issue and whether gas pains will be eased!

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