The government of St Lucia has defended its decision to impose a $1.50 excise tax on fuel after gas prices shot past $12 a gallon on Monday.
The fuel price adjustments announced today saw gasoline prices go up by $1.14, from $11.61 to $12.75 per gallon.
The cost of diesel also increased by $1.04, from $10.32 to $11.36 per gallon. The 20 pound cylinder of cooking gas increased from $29.65 to $30.49 per cylinder or by $0.84.
At a pre-cabinet press briefing Monday morning, the Minister in the Ministry of Finance, Dr Ubaldus Raymond said St Lucians should have been paying more for gasoline, but the government has taken a policy decision not to allow gas prices to go beyond $12.75 a gallon.
“When the calculations were made for gasoline the prices actually went above $12.75, so what the government did was to make the difference, or to reduce on the excise tax for gasoline. So the increase, actually at this point in time was actually $1.38, not $1.50 on the excise tax,” Dr. Raymond said.
Dr. Raymond said the government will maintain this policy in the short to medium term.
“For instance, if after making the calculations, the price of gasoline ends up being $12.80, we gonna reduce the excise tax from $1.50 to $1.45 so the new price would be $12.75,” Raymond said.
The government announced during the budget that the excise tax on fuel would increase from $2.50 to $4.00.
The Allen-Chastanet administration says the new tax will help to limit the number of loans taken to repair and rehabilitate roads.
Dr. Raymond says the government expects to generate approximately $22 – $23 million dollars from the new fuel excise tax.