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Paulwell says fuel tax will impact consumers negatively

Published:Friday | May 13, 2016 | 12:00 AMEdmond Campbell

Former Energy Minister Phillip Paulwell says consumers who have been benefiting from reduced electricity rates from the Jamaica Public Service (JPS) over the last 12 months could see a hike in the cost of energy with the Government's imposition of new taxes on heavy fuel oil and liquefied natural gas.

The JPS recently concluded work to convert its Bogue Power Plant in Montego Bay, St James, to dual-fuel capability.

United States-based New Fortress Energy is expected to bring liquefied natural gas into the island by August, at which point the newly converted Bogue power plant will begin to use the more environmentally friendly fuel.

Paulwell's concerns came as he spoke with journalists yesterday at the end of Shaw's opening contribution to the Budget Debate.

"Currently, the JPS does not pay taxes on heavy fuel oil. Government has now imposed a tax both on liquefied natural gas, which will arrive in August of this year, and on heavy fuel oil, so it means a significant increase in the price of electricity that has been trending down by almost 50 per cent over the last year."

At the same time, Opposition Leader Portia Simpson Miller is taking the Government to task for "breaking its promise" by imposing new taxes to fund the tax-relief plan.

"All I can say is that they have broken their promise to the Jamaican people - no new tax - but, from all indication of what Minister Shaw said today (yesterday), it is the poor that will suffer," she said.

Central Manchester MP Peter Bunting argued that the increased taxes would affect everyone, but have a more significant effect on those who earn under $600,000 per annum, and who will have to face increased transport and electricity costs.

He described the tax measures as regressive, noting that persons at the bottom of the society are being burdened to give relief to those earning at a higher level.