LETTER OF THE DAY - Why is Government so silent on oil prices?
THE EDITOR, Sir:
Fuel prices at the pumps have increased persistently since January 2012, breaking new records. The general outlook internationally is that oil prices should come down as moves are afoot to moderate tensions in the Middle East.
I also take note of President Obama's statements last week of his intention to pilot legislation to deal with speculators on the oil market. Of course, this is an attempt to be responsive and sensitive to the effects of increased fuel prices on American consumers. At least he is trying to do something.
In Jamaica, our Government is silent on the persistent price increases. The usual chorus that hounded the JLP, when we faced a recession and an oil price crisis last year, is now deafeningly mute.
Nevertheless, businesses and consumers are feeling the pinch. The average car uses about 60 litres of gas and the price has increased by roughly $15 since January. Do the math. It is costing the average motorist an additional $900 more to fill up his tank.
The tax structure on gasolene gives the Government a windfall on petrol when the price rises. It was just before the announcement of the Budget last year that gasolene retailers lobbied relentlessly for the rollback and capping of the gas tax, and the then PNP Opposition even went as far as threatening street protests, despite the adverse effect it could have on the hard-earned stability of the economy.
Although we really needed the gas-tax revenue, we took a decision that was both responsive and responsible. (See http://rjrnewsonline.com/business/cut-fuel-tax-was-deliberate-move%20). The JLP Government rolled back the gas tax from 15 per cent to 10 per cent, which brought instant savings to the consumers of approximately $5 per litre at the gas pumps.
Call to action
High fuel prices have a significant inflationary effect as well as a strong negative impact on growth. Rolling back the gas tax was not only a relief to consumers, but it had the effect of providing a stimulus and maintaining economic stability. We grew in subsequent quarters and maintained stable
This Government that preaches how it will balance the lives of people against seeming economic imperatives appears unwilling to act to do so. I once again urge it to act now.
The Government has an ample 26 per cent of taxes on gas, which gives it space to bring some relief to our consumers.
Opposition Spokesperson on Industry,
Commerce & Energy