In a statement today the Opposition spokesman on finance said Jamaica now had nothing to get, as the country was now unprotected because the JLP Government abandoned the insurance when it came to power.
Mr Golding said, "In 2015, at a time when the world was enjoying a temporary dip in oil prices, the PNP Administration considered it prudent to begin purchasing insurance to protect the country against risk of world oil prices once again rising to unaffordable levels. That insurance was the oil price hedge, and it was paid for by a tax of J$5.00 per litre on petrol.”
He said, “having left the country unprotected, this JLP Government has no moral authority to insist on retaining the oil hedge tax.”
The Shadow Minister of Finance said, “the world oil price is now higher than the price which would have triggered payments to Jamaica under the insurance purchased in 2015. But Jamaica has nothing to get, because the country is now unprotected because the JLP Government abandoned the insurance when it came to power.”
Although the JLP Government has abandoned the purpose of the tax, they have not rolled back the tax. At the same time, oil prices have gone up. As a result, the price of gas at the pump is now the highest it has ever been. Indeed, nearly 40% of the price Jamaicans now pay for gas is in fact an imposition of tax, Mr Golding explained.
The hedge tax is now a symbol of the unfairness of the heavy burden Jamaicans are being made to bear and urges the Government to listen to the people, Golding says.
The Shadow Minister of Finance said, the oil hedge tax was specifically to pay for insurance for the country. Jamaicans are saying that it is unethical for this tax to be used for other purposes, leaving the country unprotected as oil prices rise, while Jamaicans have to pay more than ever before.
The impact of the tax is dramatic. For example, in 2013 when oil was US$100 per barrel, Jamaicans were paying J$112 per litre for gas. In contrast, with oil now at US$65 per barrel, Jamaicans are now paying J$140 per litre. Gas at the pump is much higher, even though oil is much lower.
The Finance Minister has said that now is not the time to roll back the gas tax, as it is needed for important public investments and social spending.
The Opposition says that he could equally have said that the tax is paying for the ever-increasing list of scandals plaguing the JLP Government, including debushing to fight local elections, used cars that were not delivered to the Police, and massive overruns in building a wall at PetroJam.
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