The Government of Saint Vincent has taken steps to mitigate the impact of fluctuations in global crude oil prices.
The government is reducing the excise tax on all petroleum products and also reducing the custom service charge by 50%. Additionally, the government is eliminating both the custom service charge and excise taxes on all diesel used for the purpose of generating electricity.
The elimination of all taxes on diesel for electricity generation is estimated to result in an annual loss of US$6.5 million in foregone revenue to the government of Saint Vincent.
This loss is anticipated to be offset by lower costs for electricity generated using diesel and ultimately, passed through to consumers as a lower cost product.
According to Prime Minister Godwin Friday, without this governmental measure, gas prices would have increased from their current rate of $13.22 per gallon to approximately $18.82 per gallon due to increasing global crude oil prices.
Instead, the government has set a maximum allowable price of $16.92 per gallon which represents an absorption of approximately $1.90 per gallon that would have otherwise been passed on to motorists.
Similarly, consumers purchasing diesel will also benefit from similar price protection measures. Regular diesel was anticipated to increase from its current rate of $12.56 per gallon to approximately $17.71 per gallon.
However, the price of regular diesel has been capped at $16.26 per gallon resulting in a reduction in the price paid by consumers of approximately $1.45 per gallon. In addition, the price of low sulfur diesel has been reduced to $16.40 per gallon thereby preventing an increase to almost $17.85 per gallon.
These reductions are expected to reduce the total increases in food and materials prices and maintain Saint Vincent and the Grenadines’ position as one of the jurisdictions with the lowest fuel prices in the OECS.