St Lucia Modifies Fuel Price Policy

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By the Caribbean Journal staff

St Lucia’s government has adopt a modified version of its so-called Fuel Pass Through Pricing Mechanism.

The new policy on fuel price allows for the retail price of fuel to be adjusted every three months rather than on a monthly basis.

Beginning this week, consumers in St Lucia pay a marginal increase in the retail price of gasoline, but savings exist for diesel users, in keeping with changes in global oil prices.

While the prices of gasoline has increased, the price of diesel has dropped, with retail prices for cooking gas and kerosene unchanged.

According to Prime Minister Dr Kenny Anthony, the mechanism needed to be changed because it created uncertainty for customers.

“The system has never worked in all its purity,” he said. “While it was introduced by the former administration, there was never consistent and faithful application of it.”

In May 2011, when fuel prices increased, the country’s government opted to reduce excise taxes, instead of the Pass Through Mechanism.

In recent times, the current administration said it has shared the burden of increases between government and consumers.

“While there is no doubt that the monthly adjustments would better protect government revenue, it is equally true that constant changes of fuel prices produce greater uncertainty among consumers and businesses,” he said.

The new fuel policy came after “careful consideration and analysis” of different versions of the mechanism.

The retail prices of fuel products will next be adjusted in or around August.

 

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