Chief Secretary Farley Augustine has strongly urged the government to consider all aspects –particularly the fragile state of Tobago’s economy – before removing the fuel subsidy.
Although the economic effects from the Russian invasion of Ukraine and the covid19 pandemic cannot be ignored, Augustine said now is not the time to remove subsidies on fuel.
He was speaking at a post-Executive Council media briefing on Wednesday.
At another instalment of Conversations with the Prime Minister on March 8, the Prime Minister said the country cannot be insulated from the hike in fuel prices.
But Augustine said, "There are several things that we also have to consider in the mix, it's not just about the fuel we pay for but about also the quality of roads, the cost of vehicles and the amount of taxes we pay on these.”
He said government must remember that an efficient and reliable public transport service remains an issue throughout the country so travellers will be hit hard with the spike in taxi fares once the government takes this route.
Touching on the recent $1 increase in taxi fares by Tobago taxi drivers, Augustine predicts Tobagonians would have to pay double for transportation.
"On the PTSC (Public Transport Service Corporation) bus, it's still $8 to Speyside and Charlottesville (from Scarborough). It is double that to Charlotteville using private taxis or maxi taxis. That will increase even further, especially with the absence of efficient public transportation. It is difficult to fully rationalise the full removal of the fuel subsidies.
“I understand why the government wants to get to that direction. I understand that there are cash-flow issues, and it's happening all around the corner, not just the central government of THA (Tobago House of Assembly), so I understand why an economist would want to say let’s head in that direction but now is just not the best of time for such an arrangement."
Business Chamber: Purchasing power must remain
Head of the Tobago Business Chamber Martin George said it’s understandable for the government to consider this move, but raised concerns on the purchasing power of the population.
He has asked Tobago businesses to see how best they can cushion the ripple effects of the continuous changes in the prices of goods and services.
"While we understand that these subsidies cannot remain in place indefinitely, because in any economic theory that could never be a long-term solution to a short-term problem, we also urged the government to be gradual in the removal of the subsidies so that the population can have a chance to adjust theirs too."
He said businesses do not want to price out their customers.
"I think that many businesses are trying to make the adaptation and the adjustment to ensure that they are not unduly passing off any burden of any great amount of higher prices to the customers. Because at the end of the day, we want to ensure that people are happy to come to Tobago to enjoy Tobago, enjoy the services, the warmth, and the hospitality and make sure
