By the New Democratic Party
We understand that while we fix the big picture, you are still feeling the squeeze. Responsible leadership means balancing the books while protecting the vulnerable.
We have development investments while sustaining necessary social programs. That is why we are committed to the measures to reduce the high cost of living on households and to ease the pain on our people.
Today, I am speaking directly to every mother who is stretching a dollar at the supermarket, to every father who is trying to keep fuel in the tank and tyres on the road to get to work, to business owners wondering how much longer they can absorb rising costs without passing them on to their customers.
The truth is, we are facing a difficult global reality. Across the world, conflicts have caused disruptions. They have caused disruptions in international shipping that has pushed up the price of fuel, of electricity costs, of cooking gas and of imported goods.
Between January and May of this year, the price of Brent Crude Oil rose by 68 percent, from around US $64.50 per barrel to over $108 per barrel. That is a massive increase in a relatively short period of time.
For a small island developing state that depends on imported fuel, those price increases reach us quickly and they affect us directly. If those price increases are passed through directly to the consumers in our country, the impact would be very severe. Without our government taking steps to cushion the impact of global price increases. Gasoline prices at the pump would go up by approximately $5.60 per gallon, an increase of over 42%, and would mean consumers would pay nearly $19 per gallon at the pump, diesel would be near $18.00 per gallon.
That kind of increase would not just affect drivers, it would affect transport fares, food prices, electricity bills, farming costs, business costs, and ultimately the cost of living for every household in our country.
My government refuses to sit back and allow that to happen. We will do all that we can to keep those prices as low as possible and reduce the impact of global oil prices as much as possible.
At the beginning of the year, we introduced several measures that put money back into your pockets. You are familiar with those measures. Today, I am announcing a set of urgent cost of living measures, designed to cushion the blow for the average family while protecting jobs and businesses and promoting economic stability. These are targeted, responsible measures aimed at helping people through a difficult time that has resulted from circumstances beyond our control.
What we can do to make things easier for ordinary people, we will do. My fellow Vincentians, for months we have worked to maintain price stability despite growing international pressures. But the global market pressures have persisted longer than we had hoped. And we must now respond carefully and effectively.
The global oil market currently demands an increase of approximately $5.60 on gasoline and over $5 on diesel. Without government action, gasoline would rise from what it is now of $13.22 a gallon to approximately $18.82 per gallon. Diesel would increase from $12.56 a gallon to roughly $17.71. While low sulfur diesel would climb from $12.93 to nearly $17.85 per gallon.
Our people have endured many shocks over the past few years. We are still recovering from Hurricane Beryl and even from the La Soufriere eruptions. The people of this country deserve more than a government that simply watches global inflation crush household budgets.
Therefore, effective immediately, we are implementing a three-month intervention measure to suppress the effects of high fuel prices by one, reducing excise tax and also by reducing the custom service charge by 50 % on imported petroleum products. What does this mean in practical terms? Instead of gasoline reaching nearly $19 per gallon, the intervention will hold the price to approximately $16.92 per gallon.
Instead of diesel, climbing to almost $17.71, the intervention keeps the price at $16.26 per gallon. And instead of low-sulfur diesel rising to $17.85, the adjusted price will be $16.40. Those reductions represent real savings for ordinary people.
On gasoline, the government intervention is absorbing approximately $1.90 per gallon that would otherwise have been passed on to consumers. And for diesel, it is absorbing approximately $1.45 per gallon. Without this intervention, a standard vehicle owner would have seen fuel costs jump higher in a single month. Instead, this measure puts meaningful savings back into household budgets so people can shop for groceries.
For a minivan operator, a taxi operator, for farmers and for fishers, it means operating costs lower than they might have been based on the world oil prices. That is, the measures keep prices lower for these producers. It means slowing the increase in food and other material prices, delaying the passing on the costs to consumers.
Without intervention, St. Vincent and the Grenadines would have become one of the most expensive Eastern Caribbean countries for fuel. Now, because of the intervention, it keeps gasoline prices at $16.92 and diesel at $16.26. We are among the lowest in the OECS region. Now that matters because it eases the burden of adjustment for our people.
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