The fuel pass-through issue: Will it be Kenny & Tony again?

One aspect of the 2012/2013 Budget of Estimates which many St Lucians will be paying more than close attention to is the treatment of the price of fuel by the Kenny Anthony administration. While in opposition, Dr Anthony and the St Lucia Labour Party employed the full public relations engine at their disposal to criticize,
attack, vilify and put pressure on the policy of the then incumbent Government.
The Labour Party accused the Government of the day of profiteering at the expense of the poor St Lucian. The government was characterized as wicked, uncaring and insensitive for not lowering or removing altogether the government tax on fuel that was making the price exorbitant. Dr Anthony argued that there was no need for the tax level to be so high and government was making a profit off poor St Lucians. Despite the global oil situation, he and his party colleagues called for the removal of “this oppressive tax regime.”
Moreover, Dr Anthony and his team went on to severely criticize the pass -through mechanism employed by the then government, claiming that the frequency of the adjustment was too much and created too much instability and did not provide St Lucians with any time to get accustomed to the adjusted price. He argued for a three-month rather than a monthly
price adjustment. All of this even though it was during Dr Anthony’s first stint as St Lucia’s Minister of Finance that the fuel pass-through mechanism was devised and announced in his budget address. The year was 1999.
Though this system was promoted by the OECS Ministers of Finance who understood the danger of governments trying to shield consumers indefinitely from the realities of a volatile and escalating global oil crisis, Dr Anthony rejected his own co-invention. To be fair, he was always too shy to introduce his announced policy during his first tenure. However, we must concede that he has never been shy to criticize, even demonize, his other inventions and creations when convenient. The reality is that most, if not all non-oil producing countries, cannot afford to not tax oil imports and consumption.
In an economic situation where government is facing a huge fiscal deficit (the last two years) one may have understood the inability and reluctance of a government to subsidize (with real subsidy, not imagined) a “non basic but essential item” over whose price fluctuations they had little control. Now the shoe is on the other foot, Dr Anthony is again the Minister of Finance and must balance his Budget, find the money to subsidize fuel, and still provide the promised services and goodies. What will Kenny do? That’s the question on everyone’s lips. Let us not hope, unlike the voices that clamored for the former regime to remove or lower the tax on fuel and are now uncharacteristically silent, that our Minister of Finance will speak eloquently and loudly on the fuel pass-through mechanism!

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