Don't blame gas tax for high prices, says Shaw
Finance minister Audley Shaw says that he would be launching an immediate investigation into what he described as unreasonable gas prices at the pumps, while rejecting claims that the Government's imposition of additional taxes on gasolene is the reason.
Speaking at a signing ceremony for the Loan Contract for Energy and Efficiency Programme between the Government and the Inter-American Development Bank at the ministry's offices yesterday, Shaw noted that he would be engaging the ministries of energy and industry to see what solutions could be achieved.
"I have a particular interest at this time in looking very carefully at what is happening in the pricing mechanisms having to do with regular fuel. Let me get one thing out of the way first: the Government has imposed fuel taxes, but the imposition of the fuel taxes cannot in any way explain the very, very sharp increases in the price of fuel at the pump and is the subject of an investigation," he said.
"Not withstanding those taxes, the truth is, when the price of oil on the world market goes up and up, over $100 a barrel, we see the price go right up at the pump. When the price goes down, and it has gone down sharply, literally cut in half, we haven't seen a similar fall in price of fuel at the pump. It bears some qualitative, deliberate, and wilful investigation, which will be done," the minister said.
He added: "A gallon of fuel bought in Canada today at Jamaica's exchange rate is $138 per gallon. That same gallon of fuel today in Jamaica is costing over $500. That is not at all explained by government taxes whatsoever."
Phillip Chug, president of the Jamaica Gasoline Retailers Association, said that he supported the minister as he is within his right to question prices. He said, however, that he wanted to remind the public that there were many factors that contributed to gas prices.
"We agree that from source, it needs to be investigated because a barrel of gasolene is still at $55. It's nowhere near the $110 it was, and to be seeing these prices at the pump ... . So the investigation is in order, and we would like to know the result," Chung said.
"We must remind the public that the component that makes up that final price has to do with a lot of players."