He said whereas the increased electricity prices may also be reflecting ongoing devaluation of the Jamaican dollar, the portion of the SCT which was intended to finance the Hedge Fund continues to be a significant contributor to high energy prices.
This, he said, is particularly egregious as the government has bought no oil hedge insurance for the past four years.
The continued pass through of these taxes to end users is causing additional burden to the Jamaican consumers at a time when many have lost their incomes and businesses, and are struggling to make ends meet due to effect of the COVID-19 pandemic on the economy.
Mr. Paulwell said with the closing of schools and children receiving instructions through online platforms, domestic energy usage is increasing significantly as households are using more electricity for CXC and other academic preparation.
According to current public information, JPS customers are experiencing an average increase of some 7.3% on their electricity bills due to the rapid devaluation of the Jamaican dollar and the fact that Petrojam prices are not falling in line with world market trends. JPSCo has also announced that it is using $142.95: US$1 to calculate customer bills for the month of May.
“In light of the reduction in fuel costs globally, which should have resulted in purchasing prices being at the lowest they have been in decades, I am calling for the removal of the hedge fund component of the SCT and the GCT for the benefit of lower oil prices to be passed on to electricity consumers”, he said.
The SCT was in part, put in place to establish a hedge around the skyrocketing oil prices to protect Jamaica from the unpredictable global fluctuations in fuel costs. Despite refusing to re-establish the protective oil hedge, the government continues to collect this tax, Mr. Paulwell said.
“It is hard to imagine that Jamaican consumers and businesses can continue to bear increases in energy prices in the present circumstances. It is full time that they benefit from lower international oil prices”, he said.
Mr. Paulwell said the government had an obligation to act in protection of Jamaican consumers, who were already struggling in difficult times and who now face imminent economic disaster in their households. This disaster can be averted, and the consumers can get relief if the government acts decisively.