MANDEVILLE, Manchester — President of the Jamaica Gasoline Retailers Association (JGRA) Trevor Heaven has renewed calls for Government to cap its ad valorem take at $90 per barrel of oil, arguing that energy users are being fleeced by an unjust tax system.
Additionally, Heaven wants the Government to use some of its “windfall of income” from GCT (general consumption tax) on electricity usage to support those who would invest in capital equipment for renewable energy.
In a hard-hitting address to the Rotary Club of Mandeville at the Golf View Hotel last week, Heaven also lashed out at the Office of Utilities Regulations (OUR) for what he said was a failure to protect consumers from the excesses of the electricity provider, the Jamaica Public Service Company (JPS).
Heaven reminded Mandeville Rotarians that while the Government had earlier this month reduced the ad valorem tax on fuel from 15 per cent to 10 per cent following a threat of protest action by the Opposition People’s National Party (PNP), the move had been described as temporary and subject to a quarterly review.
“This in no way answers our problems,” said Heaven. He claimed that with “natural” international oil prices escalating, consumers are being doubly hurt, since even at the reduced level, the ad valorem tax continues to inflate energy costs as an add on to “natural price increases”. That, he said, was the logic behind the call by the JGRA and the allied micro, small and medium sized enterprises for a specific monetary cap to be placed on the tax take per barrel of oil.
“We are suggesting and we have articulated very forcefully that Government should seek to retain the 15 per cent ad valorem, no discount, but then cap it at $90, or if not at a figure that is considered reasonable,” Heaven said. That, he suggested, “would stabilise the price and the only increase we would see coming to the market would be (the result) of natural increases in fuel on the international market”.
He added: “What we are seeing now … even at 10 per cent ad valorem, is … natural increases in prices due to movement in prices internationally, in addition to the 10 per cent (ad valorem) of a higher (escalating) figure.”
Heaven claimed revenue reaped from the ad valorem tax had exceeded the $9.4 billion projected by the Government. The earnings, he pointed out, had been originally projected at a rate of 15 per cent “based at the time on a price of $75 per barrel” of oil.
There has been rapid escalation in international oil prices over recent months largely due to conflict and instability in the North Africa and the Middle East.
The JGRA head criticised powerful business associations, including the Private Sector Organisation of Jamaica (PSOJ) and the Jamaica Chamber of Commerce as well and “economists, learned individuals with big chat” for their approach to the association’s recommendations first made to Government in late February.
“I call them waggonists. They came aboard hopping the JGRA train (after the PNP made its call for protests) looking comfort and I ask them where were they before…,” he said.
He suggested that had the PSOJ and others initially joined with JGRA and the small business alliance in the appeal to Government, the country would have been spared the threat of “devastation and destruction” which he claimed protests would have triggered.
He also lashed out at the Government for failing to heed the JGRA and its allies before being forced to buckle under the threat from the political opposition.
Turning to electricity usage, Heaven said the Government should allocate some, “maybe 50 per cent” of what he claimed was a windfall from GCT “far above what was projected” to those prepared to invest in renewable energy.
“We cannot continue to burden the country with the debt of having to pay for octane and oil. We need to look at investing in renewables; wind, solar and so on…,” said Heaven.
Insisting that “the JPS is a major issue, a major cost” for Jamaicans, not least those in business, Heaven said the OUR was failing to fulfil its mandate.
“The JPS do what they do with the approval of the OUR. The OUR validates them. How can the OUR validate inefficiency of the JPS at the expense of its customers? How can the OUR allow JPS to recover stolen electricity by billing legitimate customers …?, there is absolutely no reason why they see a line with a piece of wire hanging over it and they walk past and leave it alone and then you and I as legitimate customers pay for that … 20 per cent losses for stolen electricity is paid for by you and I,” said Heaven.
He also questioned why the OUR “allow us as customers to pay for all the capital investment by the company who proudly say to you ‘we the JPS propose to increase our capacity … and you must pay for it’. And the OUR agrees, I ask the question who is the OUR working for… are they acting in the best interest of people and county. I don’t think so…”
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