| New tax, oil prices drive up fuel costs | | Print | |
| Written by Richard Green/richard@fptci.com | |||
| Thursday, 14 April 2011 10:47 | |||
 The price of fuel continues to rise well above $5 a U.S. gallon as the interim government imposes an additional tax of 25 cents per Imperial gallon to raise money for capital improvements. The interim government had approved an additional fuel tax of 50 cents per Imperial gallon during the summer of 2010, when it was already 25 cents. Only half the increase was imposed until now. Now the fuel tax is 75 cents per Imperial gallon, or about 62 cents per U.S. gallon. Combined with existing import duty and the new 4-percent Customs Processing Fee, the total tax per gallon is about $1.10 per U.S. gallon, or about 20 percent of the current ($5.25 per U.S. gallon) price of gasoline at the pump in the Turks and Caicos Islands. In the United States, the average tax is 13 percent on fuel that is expected to be near $4 a gallon this year. In his budget statement last week, Permanent Secretary for Finance Delton Jones said the spending for capital improvements will be limited for the next three years, and that new fuel tax revenue will help. “Some high priority projects do not yet have funding, including the rebuilding of Ona Glinton Primary School, the repair of the causeway between North and Middle Caicos, and improvements to the airport at South Caicos,” Jones said. “Capital spending, if carefully prioritised and well managed, can also provide much needed stimulus to the economy of the Turks and Caicos Islands.” Half of approximately $6 million in existing capital spending commitments for 2011-12 will be met with funding from the Caribbean Development Bank, the European Union and the Department for International Development. The TCI will pay for the other half. The new fuel tax comes at a time when crude oil prices are soaring, which also affects the price at the pump. Crude oil prices have climbed steadily since May, some topping $125 a barrel this month. That compares to less than $100 a barrel in December. Predictions are that prices will drop back below $100 by the end of the year. But right now in the TCI, increased crude prices also increase the cost of shipping gasoline and diesel fuels — and everything else — which has a widespread impact on the cost of living.
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