Jamaica Opposition Leader Bruce Golding sounded a strong warning yesterday that the Jamaica Labour Party will vigorously oppose any attempt by the Government to increase the tax on gasolene.
Mr. Golding said he was responding to a statement made by Prime Minister P.J. Patterson at the People’s National Party’s annual conference on Saturday, in which Mr. Patterson allegedly accused the Opposition of “being a hindrance to serious deliberations on the energy bill”.
According to Mr. Golding, the Government has been considering hiking the gas tax as a means of forcing consumers to conserve, reports the Jamaica Gleaner. The Opposition Leader pointed to a statement by Finance Minister, Dr. Omar Davies, in last year’s Budget Debate where he said the Government needed to “take a more mature view” on the price of oil.
He also pointed to the Prime Minister’s comments in the same debate that maintaining low oil prices was a “misallocation of resources and is undermining the investment and growth prospects of the country.”
Mr. Golding argued that any increase in the gas tax at this time would impose additional hardships on the already overburdened consumers and aggravate an already high inflation rate. He also pointed out that there was no empirical evidence to suggest that increased gas prices would result in reduced consumption. On the contrary, he maintained that although gas prices have more than doubled in the past 12 months, there has been no appreciable reduction in consumption.
World oil prices have spiralled out of control over the past year, trading around the US$65 per barrel mark currently. The country’s oil bill is expected to rise by about 50 per cent over the level last year with oil prices expected to remain above US$55 per barrel for the next 12 months.
Neighbours the Dominican Republic announced a revised energy-saving plan that includes closing gas stations one day a week, keeping public buses off the road every other day and restricting the use of state vehicles.
In a nationwide address Sunday night, President Leonel Fernandez said the measures were necessary to combat rising world energy prices, and warned failing to significantly reduce oil consumption could spark inflation and economic crisis in the Caribbean nation of 8.8 million.
Plans by the Jamaican Government to increase the tax on gasolene in July 1999 sparked massive islandwide riots, resulting in a total shutdown of the country for three days. This forced the Government to roll back the increase.
Mr. Golding also challenged Mr. Patterson’s argument that Jamaica’s gas prices were lower than other non-oil-producing countries as justification for increasing the gas tax. He claimed that of 163 countries whose pump prices are monitored by the International Energy Agency, Jamaica was ranked 101.
In the Budget Debate in April, the Opposition had indicated a willingness to participate in a Joint Select Committee proposed by Dr. Davies to examine Jamaica’s energy policy in light of the instability in the oil market.
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