Prime Minister Ralph Gonsalves has hinted that his government may soon increase the price of fuel at the pump.
“… a month ago, we were able to keep the price stable by subsidising, by not charging the full excise tax,” he said on radio on Wednesday.
Gonsalves said gasoline is EC$14.69 per gallon at the pump, but should be EC$1.50 more if his government had not waived the excise tax.
For diesel, the government is absorbing EC$1.05 on diesel, which is currently EC$13.20 a gallon.
“The low sulphur diesel, which is $12.8, should be $1.05 more. But even $1.05 on the diesel and the $1.50 [on gasoline], the increase is now outstripping that, the numbers I saw yesterday,” he said on Wednesday.
“So some of that increase will probably have to be passed on because, as you pose the question, well, we can’t go more than $1.50, the subsidy on the gas or $1.05 on the diesel. And then, the question as to how long we can hold that.”
He said that the government has said that it would try to waive the excise tax for three months.
“But that subsidy is being outstripped by the actual increases which are now coming in with the imports,” the prime minister said.
He said he knows that omnibus operators have been asking for an increase in bus fares.
“I could understand,” the prime minister said.
Gonsalves was speaking in the context of higher commodity prices globally as a result of COVID-19 and the war in Ukraine.
He said that British newspapers reported, on Wednesday, that inflation, at 9%, was the highest in 40 years.
“It’s expected before the end of this year it will go 10.5%. The chancellor of the exchequer and the prime minister throwing their hands up in the air and say they don’t know what to do,” Gonsalves said.
He said that globally, over the last two years, the price of wheat has increased from US$320 per tonne to close to $560 a tonne. … freight has gone up in the last two years —global container freights by 551%.
“COVID made the problem; COVID and monopoly capitalism because when you hear them talk about supply chain disruption, some of that reads ‘market manipulation’.
“That’s why we have to do this Love Box to strengthen the social safety net and we’re doing our best with these things, but it’s an avalanche,” he said, referring to the programme under which his government donates food packages to at-risk people.
The prime minister said that in the United States, inflation averages about 10%, slightly higher than in Britain.
“But, in some states, gone up 11% or more. In the United States of America, they’re sending $40 billion worth of arms to Ukraine — 40 billion you know — but you don’t have baby formula,” Gonsalves said.
“The world’s gone crazy and that’s why we in our neck of the woods, we have to have sensible, stable, thoughtful leadership and looking at all the various angles to be able to hold things together to ease the pressure on people while at the same time trumping for sustainable development like I began by talking about and we can’t shoot ourselves in the foot with criminality, including violence against women and these homicides and we can’t be lazy, we have to work hard and smart.”