Opposition Leader says tax on gas too high!

In his delivery to the House of Assembly this week one of the issues Opposition Leader Kenny Anthony focused on was fuel prices.

Said Anthony, “The Prime Minister said fuel prices are determined by global market forces which is outside of the control of St Lucia.  When we speak of oil prices, we seem to forget our supplier is none other than Trinidad and Tobago.  But, who has ever said the government controls the global price of fuel?  The reality is the price at the pump is dictated by one authority—the Government of St Lucia.  That is why you have changes every month.  The final price is determined by the various charges and taxes the government imposes and the frequency with which it chooses to adjust prices.  We say the tax on gas is too high.  We say it is extortion.”

Anthony explained, “Many people believe that it is only $3 of consumption tax that the government collects on every gallon of gasoline and diesel.  This is not really accurate because there is an additional 5 percent in cost, insurance and freight-what we call CIF, a service charge on every gallon.  In the present circumstances, the 5 percent service charge is the equivalent to an additional $0.67 on every gallon of fuel.  Therefore the government collects $3.67 on every gallon of fuel, not $3 as commonly believed.  What is more unpardonable is the fact the amount that government receives in taxes on every gallon of gas and diesel has been increasing on a monthly basis. As the landing cost CIF increases the 5 percent service charge increases in real terms. So for example, in March 2011 the government tax on every gallon of fuel was $3.44. In April 2011 it increased to $3.67.”

Anthony called on the government to reduce the taxes it collects on fuel to bring it in line with what was agreed when the pass-through mechanism was created. Said Anthony, “It was agreed at the time that no more than $2.00 would be collected as consumption tax. That is what St Vincent does.”

Anthony condemned the monthly price increases.  “There is too much movement, too much volatility, too much unpredictability, too much uncertainty. Instead let us shift to a system of adjustments every three months based on an average movement in prices over the period.”

He went on the further clarify his point, “No one, certainly on this side of the House has ever suggested that we abandon the pass through mechanism. These adjustments would put us in a similar situation as St Vincent where the excise tax is $2.00 per gallon. In St Vincent the customs service charge is 37 cents per gallon. So what the fuel pumps in St Vincent, the current fuel prices are as follows: unleaded gasoline: $13. 60, diesel: $12.51, kerosene: $12.18.”