Wednesday 26 February, 2020

Paulwell wants gas tax for non-existent hedge fund removed

Phillip Paulwell

Phillip Paulwell

With Jamaican motorists facing record high fuel prices, the Opposition People’s National Party (PNP), is beseeching the Government to cease collecting the tax that was imposed to sustain a hedge fund that is no longer operational.

Opposition Spokesman on Energy, Phillip Paulwell made the call during a hastily convened meeting of the House of Representatives on Tuesday. The meeting, one week after Members of Parliament had proceeded on their customary summer break, was called to give approval to the increase in the National Minimum Wage which was recently announced by Labour and Social Security Minister, Shahine Robinson.

However, like he did at last week’s meeting of the parliament’s Public Administration and Appropriations Committee (PAAC) meeting, Paulwell on Tuesday told the House that it was time for a serious look at removing the tax being collected for the hedge fund.

The hedge fund was introduced by the previous PNP Government to guard against future spikes in world oil prices at a time of escalating prices over three years ago. The tax was introduced to support the hedge.

However, those oil hedging contracts have expired and were not renewed although the $7 per litre tax on fuel remains.

“I am again urging the Government that we look at the cost structure of fuels, and in particular of the hedge money that has been collected on the basis of providing insurance for the consumers, which insurance is not in place,” Paulwell said Tuesday.

 “Give them (motorists) back this money for the hedge,” Paulwell appealed to Government MPs.

The opposition MP argued that if the price of a barrel of oil “goes to US$80 tomorrow, the Jamaican consumers would not be protected and (would) have to pay (the increase)”.

Paulwell pointed to last week’s meeting of the PAAC in which it was revealed by members of the Petrojam team in attendance that nearly 50 per cent of the price of fuel represents government taxation, including the hedge tax.

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