Jamaicans drivers still being taxed for discontinued oil hedges business jamaica gleaner r gas constant

#

Cloaking itself within the law, the Ministry of Finance dodged questions regarding a controversial tax that was introduced to pay for oil hedging contracts for Jamaica three years ago, at a time when crude prices were expected to start climbing again.

"While we agree that we have little control over the international price of fuel, a lot of the price increase is due mostly to the onerous taxes imposed … . Today, without factoring recent increases in the price of fuel on the global market, the average cost of electricity has been increased by 30 per cent to 27.5 US cents per kilowatt-hour," he said in his contribution to the Dectoral Debate on Tuesday.

"The oil hedge fund, which was introduced as an insurance against the fluctuation of oil prices and to ensure the country’s energy security, is being used as support for the Budget. The funds from that programme are now estimated at some $6.4 billion annually. We believe that there is no justification for the tax to continue. "

"Please note that the intent of the ATI Act is not intended to answer questions posed at will, but that any response should, ‘apply to official documents held in registry or other office of the court, being documents that relate only to matters of an administrative nature’ … Questions I and 4 [asking how much has been collected and if hedging would be resumed] are asking for an opinion for which no official documents exist," said the ministry.

In June 2015, the Government of Jamaica bought several oil contracts through counterparty Citibank NA. The contracts spanned a 15-month period to September 2016, and each had a different strike price. However, the average strike price was about US$66.74 per barrel.

"If the Government is going to use it [the tax] for the purpose for which it was proclaimed, then fine. But the Government seems not to have any interest in hedging. That’s the reason I have called for it to be rolled back as a tax, because the Government is not in any way interested in hedging," said the energy spokesman.

Cloaking itself within the law, the Ministry of Finance dodged questions regarding a controversial tax that was introduced to pay for oil hedging contracts for Jamaica three years ago, at a time when crude prices were expected to start climbing again.

"While we agree that we have little control over the international price of fuel, a lot of the price increase is due mostly to the onerous taxes imposed … . Today, without factoring recent increases in the price of fuel on the global market, the average cost of electricity has been increased by 30 per cent to 27.5 US cents per kilowatt-hour," he said in his contribution to the Dectoral Debate on Tuesday.

"The oil hedge fund, which was introduced as an insurance against the fluctuation of oil prices and to ensure the country’s energy security, is being used as support for the Budget. The funds from that programme are now estimated at some $6.4 billion annually. We believe that there is no justification for the tax to continue. "

"Please note that the intent of the ATI Act is not intended to answer questions posed at will, but that any response should, ‘apply to official documents held in registry or other office of the court, being documents that relate only to matters of an administrative nature’ … Questions I and 4 [asking how much has been collected and if hedging would be resumed] are asking for an opinion for which no official documents exist," said the ministry.

In June 2015, the Government of Jamaica bought several oil contracts through counterparty Citibank NA. The contracts spanned a 15-month period to September 2016, and each had a different strike price. However, the average strike price was about US$66.74 per barrel.

"If the Government is going to use it [the tax] for the purpose for which it was proclaimed, then fine. But the Government seems not to have any interest in hedging. That’s the reason I have called for it to be rolled back as a tax, because the Government is not in any way interested in hedging," said the energy spokesman.