Prime Minister Philip Davis said yesterday the government is considering reducing taxes on gasoline in an effort to lower the price of gas.
“We are now considering what we are going to do with the retail gas stations, seeking to reduce some of their taxes on VAT (value-added tax) to be able to pass that on to consumers at the pump,” said Davis at a press briefing at the Office of the Prime Minister (OPM).
“That is something in the works.”
The government has expressed this position before.
Way back in April, Financial Secretary Simon Wilson told reporters at OPM the government was considering several options, including adjusting taxes and business license fees for petroleum retailers who were complaining about losing money due to the spike in oil prices.
“Everything is on the table,” said Wilson at a briefing at the Office of the Prime Minister on April 14.
“There is no easy solution and that’s one of the issues raised by retailers … in terms of some type of tax relief.”
Gas station prices have steadily climbed for most of the year before peaking at more than $7 at Esso and nearly $7 at Rubis and Shell last month.
Consumers and gas station operators have continued to call on the government to bring relief as The Bahamas experiences its highest gas prices.
For this reason, Bahamas Petroleum Retailers Association Vice President Vasco Bastian yesterday welcomed the prime minister’s comments.
“I hope that that happens very, very, very soon,” Bastian said.
“That adjustment of the model proposed by the prime minister today at the press conference will be a breath of fresh air, not only for the gas station operators, but also to the motoring public. That will save the motoring public money. It will put more money in their pocket.”
Bastian said it is a “win win” solution as gas station operators will also save money when purchasing fuel.
Tax on gasoline in The Bahamas is $1.06 per gallon, plus value-added tax (VAT) of 10 percent on costs and freight, and one cent per gallon for gasoline sold at the pump.
The Consumer Price Index Report for June 2022 revealed that consumers paid 33.5 percent more for gasoline and 32.1 percent more for diesel on a year-over-year basis.
The report said this contributed significantly to inflation in The Bahamas.
The prime minister said yesterday the government remains focused on bringing relief to Bahamians who are grappling with high prices.
“We have been doing some things,” Davis said.
“What we did was we lowered the cost to import duties, which most of the food stores have passed on to customers. You would have seen even the food stores speaking to the fact that they are passing those savings on to the people.”
Davis said he has also had conversations with shipping agencies to determine how to reduce the cost of transporting goods to The Bahamas.
He expressed confidence that there will be some reductions in some shipping costs.
“We are working assiduously to avoid further burdening of our people as a result of these, what I call, external shocks over which we have very little control over,” Davis said.
On April 7, the prime minister told reporters that in an effort to alleviate rising inflationary pressures locally, he negotiated a 38 percent discount on shipping containers entering The Bahamas from far eastern jurisdictions and was seeking a similar discount for containers from Florida.