Opposition spokesman on mining and energy Phillip Paulwell on Friday made another call for the removal of the oil hedge insurance tax, describing it as “unfair and unconscionable”.

According to Paulwell, the tax has left consumers at the mercy of the oil market and has resulted in the price of oil products continually rising at retail stations.

Paulwell, who made the call at a news conference called by the Opposition People’s National Party (PNP), argued that since last year the prices set by Sate oil refinery Petrojam, and the margins which are added by marketing companies and retailers, have resulted in a 43 per cent increase in gasoline prices and a 41 per cent increase in kerosene prices.

He said that, while there are three items that comprise taxation for petroleum products — the hedge, which rakes in $6 billion to $7 billion in revenues per annum; a special consumption tax; and an advalorem tax — the Government, since 2016, has been using the tax to offset losses suffered from the $1.5-million tax incentive.

This, he insisted, was “unconscionable”, because the hedge was established for a special purpose.

“For example, if last year the Government had used the hedge money to purchase fuel when the price was below US$20 per barrel, it would have been a proper use of the hedge,” he said.

“It’s an insurance, so you could make those cheap purchases so that today we, as consumers, would benefit, because the price of fuel is now at US$70 per barrel. So we have missed an opportunity, and the minister of finance must accept responsibility for that,” said Paulwell, who served as minister of science, technology, energy, and mining in the previous PNP Government.

“But, beyond that, to maintain the hedge at this time is most unfair and unconscionable and we are asking that the tax, as it is not being used, be returned to the consumers and for there to be a rational review of all the taxes that are applicable, because in that litre of fuel that is purchased, more than half of it represents taxation,” he said.

Paulwell noted that the oil hedge, which was introduced by a previous PNP Government, was meant to serve as insurance against world oil price increases, which were expected to reach over US$70 a barrel in the 2015-2016 period.

The hedge would have ensured that, despite the rising prices on the global market, Jamaica would continue to buy oil at a previously agreed price.