War of words over Oil Prices

The Star (St. Lucia) - - LOCAL - By

Toni Ni­cholas

prices of oil plum­meted on the world mar­ket, hit­ting just be­low US$50 a bar­rel this week (the low­est since 2009) there has been much de­bate in Saint Lu­cia over the high costs of fuel here. This, as the prices have dropped on the in­ter­na­tional mar­ket and in some Caribbean ter­ri­to­ries, re­sult­ing in some sav­ings for con­sumers. How­ever, the gov­ern­ment of Saint Lu­cia has an­nounced that in keep­ing with its pass through mech­a­nism, where prices are ad­justed ev­ery three months, the next price change will take ef­fect on Mon­day Jan­uary 12, 2015.

Ahead of that change, leader of the United Work­ers Party (UWP) Allen Chas­tanet on Mon­day called on the Kenny An­thony ad­min­is­tra­tion to re­duce the price for lo­cal fuel im­me­di­ately, so as to bring some re­lief to the coun­try. He went on to note that the high cost of fuel was hav­ing a neg­a­tive im­pact on the Saint Lu­cian econ­omy adding that gov­ern­ment was mak­ing an es­ti­mated EC$6.80 on ev­ery gal­lon of gas be­ing sold on the is­land. The leader of the UWP also rec­om­mended that the price of fuel be ad­justed in the range of EC$10.00. The price presently stands at EC$16.30.

Fol­low­ing the state­ments of the leader of the op­po­si­tion UWP on Mon­day, the Saint Lu­cia Labour Party shot back Tues­day with a press re­lease of its own. In it the SLP ex­plained that the gov­ern­ment of Saint Lu­cia “uses a through­put cal­cu­la­tion sys­tem where the ex­cise taxes im­posed by Gov­ern­ment are ad­justed.

“Any ben­e­fit in a de­cline of price dur­ing the three month pe­riod is ab­sorbed by the petrol re­tail­ers. The con­verse would oc­cur if world mar­ket price of oil were to in­crease dur­ing a given three month pe­riod,” the state­ment read. Fur­ther, from Oc­to­ber 2014, Gov­ern­ment ex­cise tax on petrol has been EC$2.48 and Gov­ern­ment earns no ex­tra money when the price drops as the ex­cise tax is fixed.

“Gov­ern­ment in­tends at the next re­view on Jan­uary 12, 2015 to en­sure that a sub­stan­tial part of the ben­e­fit which re­tail­ers en­joy now with lower prices will be passed on to con­sumers,” the SLP state­ment added.

This week one pe­tro­leum dealer and for­mer Se­na­tor Ever­es­tus Jn Marie told the me­dia that both the SLP state­ment and the leader of the op­po­si­tion were wrong on dif­fer­ent counts. He noted that the mar­gin that both gov­ern­ment and the deal­ers re­ceive is fixed and that con­trary to pro­nounce­ments the re­tail­ers’ profit mar­gin was not higher even as prices on the world mar­ket fell. Jn Marie also de­bunked Chas­tanet’s claims that gov­ern­ment was now bag­ging in ex­cess of EC$6.00 since that too was fixed and gov­ern­ment had been re­ceiv­ing just over EC$2.00 in taxes on fuel.

A lo­cal char­tered ac- coun­tant, Richard Peterkin this week also weighed in on the dis­cus­sion and has called on the gov­ern­ment to ex­plain to the cit­i­zenry how the “pass through” mech­a­nism is cal­cu­lated to avoid any fur­ther con­fu­sion.

The dis­cus­sion on oil prices was also cen­tered around mini bus op­er­a­tors this week who are still press­ing for a hike in bus fares, even if the price of fuel at the pumps drops.

How low can you go? Mo­torists will see a drop in the price of fuel at the pumps on Mon­day. How sig­nif­i­cant that drop will be is still any­one’s

guess.

Newspapers in English

Newspapers from Saint Lucia

© PressReader. All rights reserved.