GOB Raises Import Duties on Fuel

The new shipment of fuel is in, and the acquisition cost, or C.I.F., is down, which means that pump prices should automatically go down. But they won’t, because GOB has decided to hike up import duties on fuel – AGAIN. The notice came in the form of a release today which states that based on slumping tax revenues Cabinet approved an increase of forty cents per U.S. Gallon on Premium Gasoline; an increase of thirty cents per U.S. Gallon on Regular Gasoline and an increase of a whopping eighty cents per U.S. Gallon on Diesel Oil. So let’s break that down in the context of today’s pump prices. At midnight premium fuel will actually go down by thirty-one cents – from nine thirty per gallon to eight dollars and ninety-nine cents per gallon. But Regular fuel will go UP by thirty-seven cents – from seven dollars and sixty-one cents to seven dollars and ninety-eight cents. And Diesel fuel will go way UP by a dollar – from six dollars and fifty-two cents to seven dollars and fifty-two cents. So, in context – G.O.B. is giving you thirty-one cents with one hand, but taking away one dollar and thirty-seven cents with the other. And here’s the other thing. In terms of use by consumers – premium fuel accounts for roughly twenty percent – so G.O.B. is giving a small break on the fuel used least, while hiking up the fuel used by eighty percent of consumers. The reasoning is the same given for the last time import duty was hiked over the Christmas weekend – reduced revenues. We revisit Prime Minister Barrow’s New Year’s address where he explained the then import duty hike. 

Prime Minister Dean Barrow (FILE – December 31, 2015)

“Among the challenges that we will confront, the reduction in Petrocaribe flows is perhaps the most pronounced. With the dizzying fall in oil prices, we expect to get much less from these Venezuela loan funds than we did in 2015. And already 2015′s intake was only half of 2014. This, combined with the drying up of earnings from our own petroleum exports, will put a severe dent in Government revenues. It is what, in the face of the coming step-up in SuperBond payments and the Compensation Award expected to be handed down towards the middle of the year, has caused us to raise the duty on fuel imports. The CIF price of these is so low that we were able to judge the increase a bearable burden. And with this, which is the only tax measure we will take, Government will be able to meet debt obligations and pay for expansion in services, particularly regarding national security and the acquisition of assets such as the three B.D.F. helicopters and the two latest model Coast Guard boats.”

The release from G.O.B. states that Cabinet and the Ministry of Finance believe these adjustments to be sustainable and equitable, especially in our current low-inflation environment, when compared to other potential tax adjustments.