From Caribbean360

CASTRIES, St. Lucia, Wednesday January 7, 2015, CMC – The ruling St. Lucia Labour Party (SLP) Tuesday described as “nonsensical”, claims that the government was reaping major financial benefits in the retail price of gas as a result of the drastic decline in oil prices on the global market.

In a statement Tuesday, the SLP expressed “shock” at what it said was either the apparent lack of understanding or deceitfulness from Allen Chastanet, the political leader of the main opposition United Workers Party (UWP), of how petrol prices at the pump are calculated in St Lucia.

Chastanet had on Monday called for a reduction in the price of petrol at the pumps, claiming that the government was making EC$6.80 (One EC dollar =US$0.37 cents) on every gallon of gas sold.

He said the government should ensure that the price at the pump should not be more than EC$10.00 and called on the government to recognise the negative impact of high fuel prices on the economy and production.

In recent weeks, the global price of oil has slipped from US$103 a barrel to below US$50 and Saudi Arabia, the biggest oil producer says it has no intention of reducing its output so as to effect a higher price for the commodity.

The statement from the Office of the Prime Minister explained that the government uses a throughput calculation system where the excise taxes imposed by Government are adjusted every three months.

“This means that regardless of the price of petrol on the world market the Government revenue per gallon does not change per gallon during this three month period.”

It said, “any benefit in a decline of price during the three month period is absorbed by the petrol retailers,” explaining that the converse would occur if world market price of oil were to increase during a given three month period.

The statement said that from October 2014, the excise tax on petrol has been EC$2.48 and the government earns no extra money when the price drops as the excise tax is fixed.

“Chastanet is being deliberately deceitful or he does not understand the system. He would know, as he was a minister who sat in Cabinet that when the UWP was in power the Government Tax went as high as EC$3.00.

“Since December 2011, when the SLP came into power, the tax has been on a decline on average,” the statement added.

The government said it plans at the next review on January 12, 2015, to ensure that a substantial part of the benefit which retailers enjoy now with lower prices will be passed on to consumers.

It urged Chastanet to try to understand the system or stop being so obviously deceitful and dishonest, adding that his claim that “right now it is estimated that the government is making about EC$6.80 on every gallon of gas being sold,” is a “nonsensical accusation”.

For more on this story go to: http://www.caribbean360.com/news/st-lucia-ruling-party-rebuffs-excessive-tax-claim-nonsensical#ixzz3OAC1LiH5