Tuesday, March 19, 2024

Gas prices ‘don’t make sense’

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BARBADOS IS AMONG countries which charge the highest for gasoline around the world, according to a pricing website.

Globalpetrolprices.com displays gasoline prices globally on a weekly and monthly basis. Starting from the least to the most expensive it shows the prices of 177 countries.

Barbados, which charges US$1.44 per litre, stands at number 153 in line with Malta and New Zealand which charge the same amount. That means out of 177 countries only 22 countries charge more than Barbados.

Middle Eastern countries such as Kuwait (US$0.22 per litre) Saudi Arabia (US$0.24) and Algeria (US$0.28) top the list charging the least for gasoline. Guinea is the only country which actually charges US$0.99 per litre for gasoline. Hong Kong charges the most for gasoline at US$1.85 per litre.

The site notes: “The average price of gasoline around the world is US$0.99 per litre. However, there is substantial difference in these prices among countries. As a general rule, richer countries have higher prices while poorer countries and the countries that produce and export oil, have significantly lower prices.

“One notable exception is the US which is an economically advanced country but has low gas prices. The differences in prices across countries are due to the various taxes and subsidies for gasoline.

“All countries have access to the same petroleum prices of international markets but then decide to impose different taxes. As a result, the retail price of gasoline is different.”

An industry source confirmed that Barbados’ high gas price had to do with taxes and freight to a lesser extent.

“We did a comparison with other countries and it showed that the issue in Barbados was that the taxes on petroleum products in Barbados are high. Taxes account for nearly 60 per cent of the price of gasoline.” the source said.

Pointing out that 95 per cent of countries in the Caribbean including Barbados buy oil from Trinidad, the source said, the supply price is the same for all countries. There is a little difference in freight depending on where you are. A place like Grenada which is pretty close to Trinidad might pay a small freight rate. Barbados is slightly further from Trinidad so we will pay more but it does not make any significant difference. The difference is in the tax and import duties charged by each country.”

A further analysis of GlobalPetrolPrices.com reveals that Barbados is the only Caribbean country which charges above US$1.40 per litre for gasoline.

Trinidad and Tobago is first on the chart among Caribbean countries charging $0.53 followed by Guyana at $0.84, St Vincent $0.86, Dominica $0.93, St Kitts and Nevis $0.95, Antigua and Barbuda and Jamaica both at $1.02, St Lucia $1.06 and Grenada $1.14.

petrol-prices-comparison

The source said Barbados was also one of the few countries which used a month in delay formula, pointing out that this had its advantages as well as disadvantages.

“We use a formula which is based on the average for last month’s global pricing. Barbados changes prices on the first weekend of every month. We take the average of last month so if prices are going down you don’t see the benefit of the decrease until the following month. On the other hand if prices go up we don’t pass it on as quick.

Consumer advocate Malcolm Gibbs-Taitt who has consistently criticised the high prices Barbadians pay at the pump, is of the view that something is wrong with the country’s pricing policy.

“I am so concerned about it that on a daily basis I monitor the world prices of gasoline. It is interesting that we charge more for gasoline now than we did when the prices were at its highest. So it is not making too much sense to me,” he said.

He recalled that on two different occasions when world prices reached US$50 a barrel “we were in fact charging more than when the price was US$104 dollars a barrel, so something is very wrong”.

In terms of the present situation Gibbs-Taitt said: “We have in the last two times reduced the price by eight cents, and the time before that we increased it by eight cents when the price in the world market was exactly the same. So when we increased it, it made no sense and when we decreased it to what it was, that also didn’t make sense.

“If we are paying a particular price from the world market we shouldn’t be paying any more than anybody else. It has to be that Government is charging something extra that we don’t know about and the public needs to be told what it is that we are paying for.”

Pointing out that some time ago Government had announced that the taxes imposed on gasoline would be used to subsidise health care, Gibbs-Taitt said the public needed to know if this was being done. (MB)

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