Government Appears to Have Adopted a Zero Tax Policy On Petroleum Products

• Given 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 20lb cylinder of cooking gas to be sold for just under $40, at $39.81. 
• However, users of 100lbs cylinders are unable to benefit from a similar subsidy because they are deemed to be in a higher income bracket and, therefore, more likely to afford the unadjusted market price. 
• Notably, 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 consumers buckling under the pressure of rising food prices and fuel from the current geopolitical crisis, this may be a reasonable policy to adopt for the time being. However, since tax on petroleum products is a significant revenue stream for the government, it is unlikely that this policy will be sustained for very long.

(Source: St Lucia News Online)