Bajan drivers left exposed: Fuel cap, VAT cap on gas and diesel gone Loop Barbados

The content originally appeared on: News Americas Now

Black Immigrant Daily News

The content originally appeared on: Barbados News

There is no longer a cap on retail prices and Value Added Tax (VAT) for gasoline and diesel in Barbados.

Originally, Prime Minister Mia Amor Mottley said that the cap would be put in place for six months, commencing March 2022, but in August on review and revisiting, the Minister of Finance extended the cap until January 31, 2023.

And in addition, the prime minister also capped the Value Added Tax (VAT) on these fuel products as well. In her 2022 Budget speech, she said, “Similarly, in the case of diesel, we will cap the dollar amount of value added tax payable to 37 cents per litre effect midnight on the same March 16, initially for six months. this means that the current international prices should bring down a litre of diesel from $3.46 to $3.32.”

From the move to incorporate the fuel cap and VAT cap, the country’s leader said that government stood to lose some $25.2 million in revenue.

Then in August 2022, Prime Minister Mottley announced that the price of fuel at the pump will be capped for the another five months, after the promised six-month review.

Gasoline cost $4.48 (US $2.24) per litre, while diesel will be $4.03 (US $2.01) until January 31, 2023. Mottley also said that the cap on the Value Added Tax (VAT) on gasoline and diesel, which was put in place was also to be kept in place.

For her extension, PM Mottley received praise from Jamaica’s Opposition Leader Mark Golding, who tweeted: This is what cushioning the crisis looks like, as it regards the rapid hike in gas prices this year. The JA government’s paltry “targetted” effort is simply inadequate. #CushionTheCrisis .

However, via a press release from the Ministry of Energy, Barbadians were reminded that the caps are no longer in place and they can expect to see an increase in gasoline and diesel prices at the pump as both caps are now removed.

The release issued on Sunday, February 19, stated, “The cap on both the Value Added Tax (VAT) and retail prices on gasoline and diesel was put in place in 2022, and ended on January 31, 2023, to shield consumers from the full increase of refined petroleum products.

“The Ministry of Energy and Business is now advising that the full VAT of 17.5 per cent will be fully reinstated within the price structures.”