Govt takes $45 million revenue hit to keep fuel prices steady

The Saint Lucia government has said it will keep fuel prices unchanged for another three weeks despite rising international oil prices. Prime Minister Philip J. Pierre says this decision is increasing pressure on the country’s finances.

At Monday’s Pre-Cabinet Press Briefing, Pierre said his administration has given up EC$44.9 million in revenue since April to protect consumers from higher fuel costs caused by instability in the global oil market.

Describing the situation as “not good news”, Pierre pointed to external events that have driven up global oil prices.

He explained the revenue drop comes from two main sources: lower fuel excise tax revenue and ongoing government subsidies that keep cooking gas prices low.

“… We’ve subsidised cooking gas by $5.7 million and we’ve excised tax on gasoline of $39.2 million. So our revenue projections are down by $44.9 million.”

Despite the financial impact, Pierre said the government will keep fuel prices the same during the next pricing cycle. He noted changes in international oil prices do not show up at the pump immediately.

“Even if fuel has gone up past $100 last week… as you know, there’s a lag effect,” he said.  When the price goes up in one session, it takes some time to reach us.”

Pierre said the revenue loss will not stop the government from keeping its promises or supporting households.

The article Govt takes $45 million revenue hit to keep fuel prices steady is from St. Lucia Times.