Skip to content Skip to main navigation Skip to footer

Fuel price plan

Article taken from the Nation News – Monday September 13th, 2021

Government hoping to bring about ease at the pump

GOVERNMENT IS PROPOSING to reduce the excise tax, come to an agreement with Trinidad about fuel imports and ask two major oil companies to share in the burden so consumers can pay less at the pump.

While making it clear that the Social Partnership, SOL Petroleum and Rubis would have to agree, Minister of Energy Kerrie Symmonds said yesterday he was hopeful the move would be approved.

He said since January, the cost of fuel internationally increased by about 70 per cent which led to spikes in local prices, which also include value added tax (VAT) at 17.5 per cent, excise tax at 99.3 cents per litre and fuel tax at 40 cents per litre.

“The domestic fuel prices include a few taxes, excise tax and VAT, but those taxes have not changed since this administration has been in office, so they cannot be attributed to the recent increases in fuel prices.

“However, one of the things the ministry is recommending to the Social Partnership, which must determine their position, is we feel excise tax is an area where there could be some adjustment made to assist consumers. There is room to recommend a sensible adjustment and we think that adjustment is best located at the excise,” Symmonds said.

The minister was a guest on Starcom Network’s Brass Tacks Sunday call-in programme on which the cost of living was discussed. Director of the Department of Commerce and Consumer Affairs Bertram Johnson, chief executive officer of the Barbados National Oil Company Limited James Browne, and president of the Barbados Chamber of Commerce and Industry Anthony Branker also participated. The moderator was Corey Lane.

Hopeful

Acknowledging that Barbadian motorists were paying $3.98 per litre for gasoline, Symmonds said if Government were to negotiate lower prices, they hoped the oil marketers would assist.

“Part of the discussion we have to have with the Social Partnership must be whether or not there can be some shared burden on the part of the marketers if the state is going to say in the interest of consumers, ‘we are going to intervene’.

“Let’s assume for argument’s sake that prices of fuel exceed $4 a litre, and we say at that point we will adjust the excise by how much ever cents, then we are equally saying there should be a look at the margin for the marketers, because they too should be expected to share a little bit of the burden because we are all in this economy together,” he added.

Browne said fuel costs were likely to decrease due to international trends.

He said Barbados’ current storage capacity was 80 000 barrels of gasoline, 80 000 barrels of diesel and 130 000 barrels of fuel oil. In the last year, importations have been facilitated through a one-year agreement with independent oil trader Trafigura.

“The players in the market find it hard to tie down pricing for a long time because the market fluctuates so much, so we have trouble getting longterm contracts, but we go out in the market and compete. Large tankers come to the region, store it and distribute it throughout the region. One of the companies that does that is Trafigura. They supply Trinidad. They have a huge market. They went out to tender; we both landed Trafigura. That contract comes to an end shortly and we just went back out to tender and we should have a new supplier.

“But in the last tendering process the prices came down significantly, so we should have some price reduction which is a function of the global market,” Browne explained.

Symmonds said they would explore what could be a controversial option of asking Trinidad to store some of Barbados’ barrels.

“If you can get a larger supply at your disposal, you would probably be getting in the end on a per-litre basis a better deal for the dollar. It may well be that one of the options we have at our disposal that we never explored before is to have a relationship with Trinidad, for example. Because they have so much more capacity, we can have a reserve storage held there which we can then utilise, instead of just bringing in 80 000 at any one time which lasts us for about a month.” (TG)

0 Comments

There are no comments yet

Leave a comment

Your email address will not be published. Required fields are marked *