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Vincentians will, as of Monday, begin paying more for flour.

Prime Minister Ralph Gonsalves said that his government has granted an increase that would see the retail price of flour increase by 25 cents.

Gonsalves noted that Eastern Caribbean Group of Companies, the local producer of flour, had asked the government for an increase.

He said that a case had been made out for an increase, the increase granted by his government was not as high as the company had requested.

“What we have done, in fact, is to get ECGC to take less of a margin by $2.20 per sack and we ourselves, the government, that is, we give a waiver of one half of the customs service charge, which amounted to $2.80 a sack,” Gonsalves said on the state-owned NBC Radio Friday evening.

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“So that’s $5 a sack reduction on the ex factory price,” he said, adding that there was then a reduction on the wholesale margin.

“So when you come down to the per pound price, when you see the schedule, it would be $1.75 a pound in area 1 and 2 and $1.80 in area 3 and 4,” Gonsalves said, adding that the bulk of the population live in areas 1 and 2.

“The price would have been higher  — the retail price — but for the fact that we cut the ECGC margin, we cut our customer service charge — the government’s customer service charge — by half and we reduced the extent of the wholesaler’s margin.

“So, it would move really, from $1.50 in areas one and two, which are the main populous areas, to 1.75 and then the other areas to 1.80. I think it was $1.55 in the other areas. So you notice there’s a 25 cents increase per pound — less than it otherwise would have been, because of the actions, which we have taken.”

Gonsalves said that wheat prices globally have risen by 50 to 60%.

The prime minister said this increase is “a big number”, adding that there are other costs that have increased also.

He noted that the government is helping with the price of fuel at the pump by providing a $1.50 subsidy per gallon of gasoline and $1.05 for diesel.

“And that we have subsidised fertiliser significantly, “ Gonsalves further said, adding that the central government and the state-owned electricity company, VINLEC are absorbing half of the fuel surcharge.

“That half for the government and VINLEC amounted to $800,000 on the last bill,” Gonsalves said.

“All of these are intended to lessen the pain, lessen the extent of the price increases. Of course, we don’t have any control on the importation of these commodities. We don’t produce wheat. We don’t we don’t produce gas and diesel. We don’t produce fertilizer. And these things, the prices are just going high. And we have to do what we can do to combat that,” Gonsalves said.

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