Antigua government accused of reaping hidden gas tax
Former finance minister Harold Lovell has accused the Gaston Browne government of hidden taxes following its refusal to the lower the price of petroleum products in Antigua & Barbuda, in the wake of a decline in world oil prices.
Lovell, speaking on the Observer Radio in St John's, said that by keeping the price at the pumps steady despite a 50 per cent decline in global oil prices over the past six months, the government was collecting millions of dollars in consumption taxes.
He said the government needs to "lower the price of fuel because the Browne administration is collecting three times" what the United Progressive Party used to get per month in consumption taxes.
"And in fact what that constitutes is a hidden tax increase because whereas we always said that we wouldn't seek to achieve more than the OECS target between EC$2.50 and EC$3 per gallon we were ever hardly achieving more than a dollar per gallon because we took the hit so we would not increase the price at the pump," Lovell said.
global price of oil
In recent weeks, the global price of oil has slipped from US$103 a barrel to US$51, and Saudi Arabia, the biggest oil producer, says it has no intention of reducing its output despite lower demand for the commodity.
Last week, in his New Year's Message, Prime Minister Browne said that Antigua's 2015 national budget will have a funding deficit of just under EC$450 million, or almost 70 per cent of total revenues.
"I assure you that, had we not taken serious remedial measures, the situation would have been much worse. But, I also want to reassure you that, notwithstanding this challenge, we are working to make the prospects for growth and economic expansion a vibrant reality," Browne said.
But Lovell said that all sectors of the economy would improve if the government agrees to pass on the savings from the decline in oil prices.
"Now that the price has fallen they need to pass on that benefit on to the consumers and that in itself will create an economic jump for the country because fuel drives everything and if you could get cheaper fuel oil prices, the busmen will benefit, the taxis will benefit and everybody ultimately will benefit," he said.
Lovell said that Prime Minister Browne should make cuts in the consumption taxes.