The West Indies Oil Company (WICO) is defending the decision to increase the price of petrol in Antigua and Barbuda saying this is as a result of external factors.
WICO chief executive officer, Gregory Georges, speaking on the state-owned ABS Radio and Television, said at current retail prices, the Antigua and Barbuda government is subsidizing the cost of both gasoline and diesel amidst a sharp rise in world oil prices in the wake of Russia’s invasion of Ukraine.
“So, you have that product price which determines…freight, insurance…terminal costs, inland transport …and there is a dealer’s margin…and there are only two variables you have got really in the consumption tax and the retail contract.
“So once the retail prices goes up, if you don’t adjust your pump price then your consumption tax goes down,” he added.
The government has had a price stabilization mechanism in place which has kept gasoline prices at EC$12.50 (One EC dollar=US$0.37 cents).
But Prime Minister Gaston Browne announced over the weekend that the government can no longer maintain the price of the commodity at pumps across the country.
“Probably Monday or Tuesday the latest, there will be an increase in the prices of gasoline and diesel, and it’s definitely going to be in excess of EC$15. That is the reality of it; even just to make sure that we break even, we have to increase the price,” Browne said.
Browne, who is also the Minister of Finance, detailed that the global increase of fuel prices has resulted in significant blows to Antigua and Barbuda’s revenue – on top of the losses endured throughout the COVID-19 pandemic.
“It will be good if the government could get at least two and a half million dollars or two million dollars a month so that it can continue to meet some of its obligations, especially during this period in which revenues are already down by 20 percent – and to take a further hit would be very difficult,” he said, advising citizens to be much more economical with their driving patterns to help alleviate the squeeze many pockets will feel as a result of the Russia-Ukraine conflict.
“Motorists just have to conserve the use of fuel now, and bus drivers and so on will be a little concerned. We are hoping that this is just a temporary situation and that this war in Ukraine will not protract and that is one of the things that we said early about this war, you know, we want it to end as soon as possible,” Browne said.
He also warned of the possibility of increased food prices due to inflation.
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