Belize - Belize News - Channel5Belize.com - Great Belize Productions - Belize Breaking News
Home » Economy, Featured » An Investigation into High Fuel Prices
May 30, 2018

An Investigation into High Fuel Prices

Belizeans have endured seven price hikes in transport fuels since the start of the year and the government has warned that more may come as the world price market fluctuates. But how much is outside factors to blame for the recurrent increases? Not as much as the government’s own take according to studies of figures obtained by News Five this week. While not increasing from time to time per shipment, it is now rivaling the actual landed cost of the fuel which is already refined, and easily dwarfing the commercial margin which is set by a formula of the Ministry of Finance. Tonight, News Five’s Aaron Humes takes a look at what’s fueling the pain at the pump.

 

Dean Barrow

Prime Minister Dean Barrow [File: May 16th, 2018]

“When prices to the consumer go up in this country it is as a result of factors completely beyond our control.  We have not raised our tax take on the sale of fuel in this country for the last two years or so and there is no way, I need to make clear, that we can reduce our tax take.  I believe, Financial Secretary, correct me if I am wrong, but for every ten cents that we pull back we lose two or three million dollars from the budget.  But when we said in the press release that was issued that we’re working with the importers to try to moderate the impact as much as possible, that wasn’t just glib or pious rhetoric.”

 

Aaron Humes, Reporting

The facts can be seen in this chart obtained from the government’s own records. In every instance except for kerosene, the government’s tax hike matches or outpaces the actual landed cost of regular, diesel and premium fuel. The pass-through ratio – the change in the domestic price divided by the change in the landed cost of the refined products – has hovered at or above one excluding the average thirteen percent in commercial margins taken by the primary importers: Sol, Puma and Uno. This means that the total cost as well as the taxes is passed on to Belizeans. The historical trend as seen in these charts is that even while government taxes were stable, Belizeans have always paid more than the landed cost of fuel – about fourteen percent, going up to twenty-five percent with government taxes added. It has proven true even with the advent of Petrocaribe in 2006 as payments are made at concessionary rates but the taxes are still added. So what does that mean for business? A recent survey suggests that seventy-seven percent of businesses have named taxes, including fuel taxes, a greater concern, and that a majority expect prices to rise in the near future. On the international scene, a coming meeting on June twenty-second of the Organization of Petroleum Exporting Countries is predicted to see production output increased at the behest of Russia and Saudi Arabia, to take advantage of issues in Iran and Venezuela. The latter has been Belize’s primary supplier of fuel up to its recent issues with U.S. sanctions, though Prime Minister Barrow acknowledged that it will be hard to keep up the accord.

 

Prime Minister Dean Barrow [File: May 16th, 2018]

“Two things we’ve been working on: number one, when the Petrocaribe arrangements were in place there were certain margins that were agreed with Puma, in shorthand, by way of incentives, to get them to source fuel from PDVSA because of course there were innumerable benefits redounding to Belize in consequence of using Petrocaribe and PDVSA as the source of our fuel supplies.  We’ve stopped placing orders with Venezuela.  I would not agree with anybody who says that that means the Petrocaribe program is at an end.”

 

Aaron Humes reporting for News Five.

 

According to our sources, potential solutions include establishing a ‘fuel fund’ to subsidize any price increases or simply freezing prices. In the area of revenue, the Belize Chamber of Commerce and Industry has suggested seriously going after tax arrears for G.S.T. and Income Tax which could net as much as sixty million dollars, and seriously reducing the recurrent expenditure, especially the wage bill, by committing to a policy of attrition of public officers and carefully negotiating future demands for wage and increment increases.

Be Sociable, Share!


Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

Advertise Here

Leave a Reply

CAPTCHA Image
*