With the recent increases in the price of petroleum products, the Government of Saint Lucia (GOSL) has increased its subsidy on 20lbs cylinders of cooking gas from $16.13 to $22.10 per cylinder, an increase of 37%. This has allowed a 20lbs cylinder of cooking gas to be sold for a little under $40, at $39.81. Users of 100lbs cylinders are, however, unable to enjoy a similar subsidy because they are deemed to be in a higher income bracket and, therefore, more likely to afford the unadjusted market price.
According to information coming from the retail market for cooking gas, this subsidy is likely to cost the GOSL a little over $1million per month.
However, the situation is a little different with gasoline and diesel, each attracting an excise tax of 80 cents and 88 cents per gallon respectively since the last fuel price adjustment, which took place on Monday 11th April. The total excise tax expected to be collected from the two products matches the subsidy provided for cooking gas, at just over $1 million, leaving the government with no tax revenue to collect from petroleum products.
With the excise tax on petroleum products being a significant revenue stream for the government, it is unlikely that this policy will be sustained for very long. In the circumstances, with consumers buckling under the pressure of rising food prices and fuel, it may just be a reasonable policy to adopt for now.
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