Finance and the Public Service Minister Dr Nigel Clarke has announced that the Jamaican Government is to provide $2 billion in support to offset the impact of the rising cost of fuel, which has seen a massive jump of almost 50 per cent over the past year.

Making his opening contribution to the 2022-2023 Budget Debate in the House of Representatives yesterday (March 8), Clarke disclosed that the funds are expected to provide relief to taxi operators who have fixed fares, as well as transportation support to children on the Programme of Advancement Through Health and Education (PATH).

“But there are other groups and we will dialogue with stakeholders on the best methodology for allocation of this support and announce the details shortly,” the finance minister added.

In making the announcement, Clarke noted that oil prices on Monday (March 7) hit their highest level in more than a decade due to developments related to the war in Ukraine.

“Though we know this will be temporary, this appreciation in the price of oil has a negative impact on Jamaica and on Jamaican consumers in the meantime,” he said while acknowledging that there have been, including from within the Opposition, for a removal of part or all of the Special Consumption Tax of $7 per litre that was placed on petrol by the previous People’s National Party (PNP) administration in March 2015.

Pointing to then Finance Minister Dr Peter Phillips’ introduction of the $7 fuel tax, Clarke argued however that the funds garnered from that revenue measure have been used in the years since to assist the Jamaica Labour Party administration in being able to raise the threshold for income tax, resulting in circumstance where 350,000 Jamaicans pay no income tax.

“That is a give back of over $30 billion per annum,” he noted, while pointing out that the fuel tax at the time raised $6.4 billion of which $3.3 billion was paid under Phillips to overseas bankers for a series of hedging contracts covering eight million barrels of oil over an 18-month period.

“Jamaica’s consumption of oil over that 18-month period was projected at 24 million barrels of oil. Since April 2017, Jamaicans have been relieved of an aggregate of $150 billion in personal income tax. We raised indirect taxation of the same amount to pay for this and raised social assistance by 50 per cent,” Clarke said.

“Rather than undo the gas tax, we instead decided to reduce GCT in 2020 as an economic stimulus, a give back of approximately $14 billion per annum. In the two years since, Jamaicans have benefited by $28 billion from that give back.

“When the other side raise their voices, become heated, and attempt to claim a moral high ground on this issue, I want you to ask them a simple question: what have you ever given back to the Jamaican people? Where is your give back? It
simply doesn’t exist.”