Dear Editor,

Fuel prices at the pumps have increased persistently since January 2012, breaking new records. The general outlook internationally is that oil prices should come down as moves are afoot to moderate tensions in the Middle East.

I also take note of President Obama’s statements last week of his intention to pilot legislation to deal with speculators on the oil market. Of course, this is an attempt by the US president to be responsive and sensitive to the effects of increased fuel prices on American consumers. At least he is trying to do something.

In Jamaica, our Government is silent on the persistent price increases. The usual chorus that hounded the JLP, when we faced a recession and an oil price crisis last year is now all of a sudden deafeningly mute. Nevertheless, businesses and consumers are feeling the pinch.

The average car uses about 60 litres of gas and the price has increased by roughly $15 since January. It is costing the average motorist an additional $900 to fill up their tank. The tax structure on gasoline gives the Government a windfall on gas when the price rises.

It was just before the announcement of the Budget last year that the gasoline retailers lobbied relentlessly for the rollback and capping of the “gas tax” and the then PNP Opposition even went as far as threatening street protests, despite the adverse effect it could have on the hard earned stability of the economy.

Although we really needed the gas tax revenue we took a decision that was both responsive and responsible. (See rjrnewsonline.com/business/cut-fuel-tax-was-deliberate-move). The JLP Government rolled back the gas tax from 15 per cent to 10 per cent, which brought instant savings to the consumers of approximately $5 per litre at the gas pumps.

High fuel prices have a significant inflationary effect as well as a strong negative impact on growth. Rolling back the gas tax was not only a relief to consumers but it had the effect of providing a stimulus and maintaining economic stability. We grew in subsequent quarters and maintained stable low inflation.

This Government that preaches how it will balance the lives of people against seeming economic imperatives appears unwilling to act to do so. I once again urge the Government to act now, as it will take some time for the external efforts to bring down oil prices, which are hurting our economy.

The Government has an ample 26 per cent of taxes on gas which gives it space to bring some relief to our consumers. What is the present Government waiting for to take action?

Gregory Mair

Opposition spokesman on industry, commerce & energy

gregorymair@desmondmair.com