St Lucia puts freeze on fuel prices

Prime Minister Stephenson King said the excise tax on gasoline has been reduced by 36.7 percent while the duty on gasoline has been cut about 15.67 percent.

CASTRIES, St Lucia, Friday May 13, 2011 – The price of gasoline and diesel in St Lucia has been temporarily frozen as the government tries to cushion consumers from the escalating price of oil.

Prime Minister Stephenson King said the excise tax on gasoline has been reduced by 36.7 percent while the duty on gasoline has been cut about 15.67 percent. This will result in a reduction in the revenue earned by government from the tax but it means that the prices of gasoline and diesel remain unchanged at $15.38 and $15.57 a gallon respectively.

He pointed out that the decision to keep the retail prices of gasoline and diesel unchanged was taken despite the continuous increases in the import price of fuel for the March 28 to April 22, 201 period which would have determined the price change on May 9.  

“During that period, the imported prices of gasoline and diesel increased by 13.4 percent and 4.6 percent respectively,” he said in a televised address to the nation on Wednesday night. 

“However Government has decided to absorb the increases by reducing its tax revenue. The public should note that without the reduction in the excise tax, the retail price of gasoline would have increased to $16.48 a gallon and diesel to $16.04 a gallon.”

The Prime Minister said the reduction will remain in effect for one month and will be reviewed each month thereafter.

He said the decision was based on government’s responsibility and commitment to protect local consumers even amidst international pressures.

“We have taken these steps out of concern over the adverse impact of rising fuel prices on consumers in general, on the productive sectors of the economy and on the poor and vulnerable,” King said.

“Reductions in world oil prices in the last few days are encouraging. They will influence fuel prices and together with other developments that may arise, will be passed on to consumers in subsequent periods. Government will continue to monitor closely developments in international oil prices with a view to initiating the appropriate responses. Based on the pass-through mechanism, prices will be reviewed for the next adjustment date of Monday June 6, 2011.”

The temporary reduction in the excise tax on fuel comes on the heels of a decision by government to increase the subsidy on the 20-pound cylinder of LPG cooking gas.

Notwithstanding encouraging signs of reductions in global oil prices in the last few days, the Prime Minister has urged St Lucians to use all possible measures to conserve fuel in order to limit the adverse effects of higher prices on their personal budgets, and on the national import bill.

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