Sun | Jun 26, 2022

Remove hedge fund gas tax

Published:Thursday | May 26, 2022 | 12:09 AM


The hedge fund gas tax of $7 a litre was introduced as a cushion against sharp increases in world oil prices above US$80 a barrel. So, if the price of oil fell below $80, then Jamaica would lose that money, but if it rose above $80, then Jamaican consumers would be spared the increase.

The Andrew Holness Government in its wisdom decided not to purchase this insurance-like scheme called hedge fund. However, curiously, the Government continued to collect the hedge fund gas tax.

It is like a healthcare insurance provider having decided not to provide health insurance to a citizen if he or she falls sick, continuing to collect the monthly premiums. And even after the citizen fell ill and got no payment or coverage, the health insurance provider continues to collect the monthly insurance premiums. We would conclude that the health insurance provider is immoral, irresponsible, unethical, unconscionable, wrong, wicked and ‘bad mind’.

The Government collects approximately $7b annually from this hedge fund tax that was not used for the intended purpose. So, the consumer got hit twice. The Government collects the hedge fund gas tax as a protection against increases in oil prices above $80 per barrel, and having not used it, still collects the tax. This appears to be immoral, irresponsible, unethical, unconscionable, wrong, wicked and ‘bad mind’. The Government should do the honourable thing and remove the hedge fund gas tax of $7 per litre.

In addition, the Government should pay back the consumers the approximately $42b billion collected from this tax over the years. This is the right thing to do. It is also the right time since the price of gas is $1,000 a gallon, which is causing inflation for all and impoverishment of some.

Last week, JMMB and the University of Technology sponsored the Joan Duncan Memorial lecture in a live panel discussion on ‘The urgent need to bring back moral and social ethics to our public and private priorities’ on TVJ. That panel discussion does not appear to have moved the moral needle of the country to call for the removal of this hedge fund tax which is not being used for its intended purpose.

Time to remove this hedge fund gas tax and also refund consumers.