ONLY HUMAN: Fishing in a dry pond
BARBADIAN MOTORISTS are today paying $1.33 per litre more for gasoline than they were in May 2008, while householders who use kerosene have seen a hike of 62 cents per litre over the same four-year period.
Those whose vehicles run on diesel have been hit hardest. They are paying $1.50 per litre more than they were in April 2008.
Put another way, the average family car with a 50-litre tank which, theoretically, would have cost a maximum of $107.50 to fill it in 2008, now costs that motorist $174 – a $66.50 increase.
For those who operate diesel-powered flat-bed trucks, which tend to be used for product deliveries here, their tank usually holds 100 litres. In March 2008, that trucker could fill up for $146. Today it would cost them $296 – a whopping $150 more.
The last hike in fuel prices for the year to date was on April 1. That’s when the price of gasoline moved from $3.37 to $3.48 per litre, diesel from $2.93 to $2.96 per litre, and kerosene from $1.94 to $1.99 per litre.
Two articles prompted me to have another look at these prices. The first was in the April 9 edition of the DAILY NATION, which stated that Barbadian motorists have been putting less fuel in their tanks, with reports of a slight decrease in purchases last year when compared with purchases in 2010.
It went on to quote country head of Esso’s operation here, Cally Boyea, saying that industry-wide there was three per cent less fuel consumption in 2011 than in 2010.
The second article was in the most recent SUNDAY SUN. Under the headline Petrol Pain Not Easing, it quoted a number of consumers saying that the increasing price of petrol had hit them hard, forcing many to monitor and alter the way they used their vehicles.
I am sure Minister of Finance Chris Sinckler and the other members of Cabinet are hearing similar cries.
I am sure Democratic Labour Party parliamentarians also hear stories of hardship when they hold their constituency clinics.
I am sure, too, that each one of these elected men and women tries to assure their constituents that there is light at the end of the tunnel, and that things will eventually improve.
But I wonder how long they can realistically expect their constituents to continue coping, as several are living from pay cheque to pay cheque, and from pension cheque to pension cheque.
The fact of the matter is that the tax regime imposed in Government’s successive Budgets has had the general effect of putting a stranglehold on this economy.
On fuel prices in particular, the 50 per cent increase in the excise tax and the 2.5 per cent hike in the value added tax (VAT), pushing it to 17.5 per cent, along with the upward trend in world market prices for oil, have resulted in the high prices at the pump.
With a Budget looming, Government should seriously give thought to easing this burden at the pump by restructuring the mechanism determining how the 50 per cent excise tax on gasoline is calculated, while allowing them to achieve their revenue target.
This is possible because with each increase in the price of fuel, Government gets more VAT revenue than it budgeted for. That is, if your projected earnings are on a percentage of a particular base price, when that base price goes up, your percentage take also rises, so you get more than you bargained for.
Government should therefore put a mechanism in place where the excise tax is reduced to offset the increase in VAT which they did not budget for. This would immediately lower the cost of gasoline to the consumer as the taxes would be reduced, even though the price of it has been increased.
I have spoken on this before and repeat it now because times are tough and seem to be getting worse; so a caring Government should seek to shield the public from high prices wherever and whenever possible.
Government needs to recognize that it cannot continue squeezing people to get every possible cent out of them for taxes. After a while it would come down to fishing
in a dry pond.
Sanka Price is the WEEKEND NATION and SATURDAY?SUN editor. Email [email protected]