Weekly Column

Poor energy policy causes suffering to people at every level of society. The Barbados Labour Party (BLP) got its energy policy right. That was part of the reason Barbados prospered under the BLP Government. On the other hand, the Democratic Labour Party's (DLP) energy policy reflects the Dems' lack of understanding of how the economy works and the connection between energy policy, quality of life and the performance of the Barbados economy.

It is no accident that since the Prime Minister raised energy prices, the price of everything in Barbados – from food to fuel, from bottled gas to bread – has gone sky-high. Whether you are cooking, freighting, using water or producing goods and services, you need energy. We understand this, and under the BLP energy prices were kept down so as to also control and reduce prices in the wider economy. When prices went down internationally, the BLP passed the benefit of that decrease on to the public.

Unlike the BLP, the Dems are not passing on price decreases to you. The Prime Minister raised the price of petroleum products when the international market price was about US$130 per barrel. A barrel of oil is now about US$90 and although Bajans are suffering, the Prime Minister would not reduce the local price and ease our pain. It is shameful that with its high prices, the DLP is raking in more taxes on petroleum products than any Government in the history of the country.

We were told that the BLP left a debt of $80 million at Barbados National Oil Company (BNOC). What people were not told is that so much fuel is sold in Barbados that just by adding a few cents to the price, a debt of $80 million could be wiped-off in a few months. What the DLP, which promised "freedom of information", hid from you is that although they imposed a near $2 price increase on diesel, petrol and kerosene, and $52 between large and small bottles of gas, out of those massive increases only four cents goes to repay the BNOC debt. So why such a steep increase?

Let us explain how the taxes work! There are two taxes on fuel – VAT and excise tax. If a gallon of gas costs $1, the VAT on that is 15 cents. If ten gallons are sold, then the Government makes $1.50 in VAT. When the price is increased to $2, the VAT automatically moves to 30 cents and if the same ten gallons of gas are sold, the Government gets $3 in VAT.

Every time gas prices go up people have to pay more taxes and more for everything else; the lower the price at the pump, then the lower the cost of living. A desire to control the cost of living is the reason why when prices went up internationally, the BLP reduced the excise tax in order to keep prices down at the pump. The example used earlier shows how much more money the present Government is "raking-in" in tax, when there is a difference in price of just one dollar.

So, can you imagine how much taxes this DLP is "raking-in" on fuel by selling it to us at US$112, when the market price is US$90? Have they forgotten their promise to keep down the cost of living, or was that just a campaign gimmick? Instead of giving us "relief from the pain" from their high energy prices and taxes, the DLP has made itself the biggest price gouger in the country.
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