Government’s fuel price increase is not justified says former IMF economist, Dr. Thomson Fontaine

The recent announcement by the Government of Dominica to increase fuel prices has come under scrutiny by former International Monetary Fund (IMF) economist Dr. Thomson Fontaine who says that the increase is not justified as the global oil market has now stabilized.

Effective Tuesday, May 3, the government announced new measures “to keep fuel prices under control” in light of the continued increase in the global price of oil.

According to a press release from the Office of the Prime Minister, the Ministry of Trade price analysis for petroleum products projected the following prices for the upcoming adjustment cycle:

 

Petroleum Products              Fuel Prices

Current Price              New Price Change           (+)

Gasoline                       $14.89 per gallon       $16.52 per gallon      $1.92 per gallon

Diesel                           $13.91 per gallon        $16.15 per gallon     $2.67 per gallon

Kerosene                      $12.18 per gallon        $14.14 per gallon     $2.45 per gallon

 

The release states that the cabinet has consequently decided to remove the customs service charge on gasoline and diesel with immediate effect. In addition, Cabinet is granting subsidies equivalent to 60 cents per gallon on the importation of gasoline and 21 cents per gallon on the importation of diesel until the retail price of each product returns to below $15.00 per gallon.

Therefore, with immediate effect, the prices for petroleum products are as follows: Gasoline EC$ 15.58 per gallon, Diesel EC$ 15.58 per gallon and  Kerosene EC$ 14.14 per gallon.

Reacting to the news in an interview on Q95 FM Radio, Dr. Fontaine pointed out that the projection on the global market is that oil prices are expected to remain stable at an estimated $100 – $103 for the rest of the year which now raises the question as to why the sudden increase locally.

He is of the view that the fuel price increase locally is meant only to increase government revenue and not to benefit the citizens of Dominica and is challenging the government top prove him wrong by the making public the calculations on which the increase is based.

“So it is very unfortunate. I personally believe that this could have been cushioned…I do not believe that the price increase at this time is warranted, given where the oil prices are,” he argued. “I don’t think it’s justified and if the government wants to prove me wrong what they need to do is to make the calculations that they do public.  I see no reason why it is those calculations that they use to project the prices are not made public because there seems to be a fundamental flaw in this.”

He said the increase in prices will also affect other sectors, energy in particular, and therefore, consumers will see a drastic increase in their electricity bills.

Dr. Fontaine also highlighted the situation in neighbouring countries such as St. Vincent and the Grenadines where the government, during the start of the month, decided to lower the price of fuel, gasoline and kerosene.

“They are exposed to the same conditions that we in Dominica are exposed to. They import their products just like we do and the government is reducing the prices because they’ve projected rightly, that the prices are not necessarily going to increase in the future. Here, they are decreasing the cost of fuel, why? because the world condition points to a reduction, not to an increase. And that to me is a sensible thing.” he opined.

A news article from our.today, an online publication in St Vincent and the Grenadines, confirmed the news of the reduction in fuel prices in that country.

According to the website, while addressing a recent press briefing, Finance Minister, Camillo Gonsalves, announced that the government will also waive the customs service charge on all fuel bought by VINLEC, the state-owned and sole commercial generator of electricity. This, he said, would result in a reduction in the fuel surcharge that is passed on to the customers.

Gonsalves disclosed that this measure will be reviewed after three months, during which time the government is expected to lose EC$500,000. When the revenue that is lost at the pump is factored in, the government is expected to lose about EC$934,000 monthly or just under EC$3 million during the three months.

The finance minister explained that taxes account for about 18.75 per cent of gas prices at the pump, advising that the average cost of diesel at the pump in the Eastern Caribbean Currency Union (ECCU) was EC$15.76 a gallon. Gasoline prices average EC$14.83 in the ECCU, whereas in Barbados, which is outside the currency union, consumers pay EC$21.10 a gallon.

Similar measures have also been taken in St. Kitts and Nevis, where the federal government adopted five (5) “short-term fiscal policy measures” for immediate implementation aimed at alleviating the rising cost of living in that country.

The measures were announced on Monday, May 02 by Prime Minister and Minister of Finance, Dr. the Honourable Timothy Harris, during his address to the nation where he disclosed that one such measure was the approval to amend the price build-up for gasoline which was granted by the Government on April 13, 2022.

“The Excise Tax on the importation of fuel was reduced from $2.25 per gallon to $0.95.  This significant reduction will be in place from April to September 2022.  The Government also granted an increase in the Gas Station Dealers Margin by $0.30,” said Prime Minister Harris.

“In addition to the amendment to the price build-up for gasoline, we will extend the Fuel Subsidy Programme for an additional six (6) months until September 2022.  These measures are being done to mitigate the cost of fuel at the pump and to keep the cost of public transportation affordable for our people,” a press release indicated.

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22 Comments

  1. May 9, 2022

    Tell Fontaine to show me his price per gallon and how he arrived at that price. Stop belching bubbles and show me your maths, Mr. Economist. All these guys do is talk and they are yet to show me the price they have arrived at and how they arrived at that price. They think Dominicans are stupid and can be taken on a joy ride. It does not work that way.

  2. Jonathan Y St Jean
    May 6, 2022

    So the question remains, what about the much-touted Petro Caribe initiative which was set up by this government and the Venezuelan leadership. When things were going well it served some nefarious purpose that the general public doesn’t know. Now that forces in the world are causing prices to rise one would have thought that this bulk storage facility should be able to play a meaningful role in stabilizing prices and easing the burden. Why doesn’t Skerrit and Austrie tell us why despite this initiative the government is raising prices at this time when the economy hasn’t rebounded fully from the Covid pandemic.

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    • Lawyer
      May 8, 2022

      Exactly! No doubt one of the reasons is the fact that Venezuela had to write off US$100 million of Dominica debt. Isn’t it true that the debt originated from PetroCaribe Dominica not paying Venezuela. Why don’t all you ask Skerrit, Austrie or Denise. They all know where the money gone to. Wake up Dominica!

      Hot debate. What do you think? Thumb up 5 Thumb down 3
      • Gary
        May 9, 2022

        Don’t you ever THINK, THINK, THINK.

        • Lawyer
          May 11, 2022

          Think? What about? Here are the plain facts even for a …… like YOU to understand: the government of Venezuela stated publicly that they wrote off US$100 million owed by Dominica. Now you are saying that Skerrits friends in Venezuela are lying? Why would they? Does Venezuela still supply cheaper petroleum products to DA under the PetroCaribe agreement? If, why is the Supremo increasing pump prices. THINK! Think! Stop defending the indefensible! When is your PM going to tell us what might have happened to the money????

  3. That's all folks!
    May 6, 2022

    Gas prices are ridiculous everywhere – not just DA.

    I live in NY and have been watching the prices fluctuate for months now – so trust me is not just DA.

    Hot debate. What do you think? Thumb up 11 Thumb down 11
    • Pat
      May 7, 2022

      What you have in America is a different animal. Capitalism and free enterprise raises its ugly head whenever these situations come up, to make billions/trillions for individuals aka companies regardless who is affected or disadvantaged or unfit to survive.

  4. Lin clown
    May 6, 2022

    Gary is 100% correct .In St.Lucia gasoline is $15.95 per gallon.In St.Kitts gasoline is $18.01 per gallon.This guy believe because he has PhD all Dominicans are AHOLES.This aholeism is for UWP supporters and not DLP supporters.The guy is coming South Sudan,where,like UWP 73% of the people are iliterate.

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    • Massacre
      May 9, 2022

      Clown , you are the biggest …. on here , you are comparing apples with oranges, how can you look at countries with good economic growth and compare them to the lowly Dominica stale money drains? The wages are stagnant.
      Your ruler has not stimulated the economy to put Dominicans in a position to comfortably afford this crazy rise in gas prices.
      If people like you want to compare , why don’t you compare the Tourism and agricultural industries of these countries and emulate it to Da?

    • May 9, 2022

      Lin Clown garcon when you have been fooled by a fool like Dr Dr Skerritt do you know what dat makes you? A “foolish fool”; end of story.

  5. Pat
    May 6, 2022

    I love labor for having generated so much money for our country (as if you can just throw $money at your issues and voir-la, fixed). But I’m sure glad that someone of that calibre is paying attention in this politically charged island.

    Well-loved. Like or Dislike: Thumb up 11 Thumb down 3
  6. May 6, 2022

    Many a time before Thomas Fontaine has been accused of repeating what the IMF tells him to say. This is the type of Doctorate Economist we have been experiencing here in Dominica – the so-called self-styled economist. I patiently await the objections from Telemakak and IBO France and Jonathan St. Jean – a bunch of old, hard men in their seventies and eighties with wilted minds.

    Hot debate. What do you think? Thumb up 4 Thumb down 12
    • Jonathan Y St Jean
      May 6, 2022

      @ds, the good book states clearly that wisdom comes with age. I know that you would like to see eugenics practiced in Dominica because the economic results of your puppet double doctorate dude aren’t enough for him to play “god” and hand out people’s needs to them. I don’t need any handouts from you or your inept, pea-brained hero. I’m thankful to the Almighty for letting me live to be 70 years old. He’s kept his promises to me to see three scores and ten and to see my children’s children. Many don’t live to see the promises of God and because of his graces, my brains can function so good that I get under your skin with the thoughts that I post online. Take that because I’m not going anywhere in a hurry.

      • Gary
        May 10, 2022

        Lol, What the good book says about age and wisdom and what I have seen in Dominica contradicts the good book. Look around you and see the actions of some people at their age, and shake your head in bewilderment at the things they say and do, and that include you. What nonsense, you’re talking eugenics. You make statements and I wonder if you really understand what you are saying. When you say you do not need handouts, that comes from an arrogant mind, it would be better if you said thank God I have never needed handouts, and by the way what is so bad about someone who needs handouts, as to the rest of your self gratification it is just the role play of the ego do not confuse the Mind with the Brain, they are not the same thing.

    • Jonathan Y St Jean
      May 6, 2022

      @ds, you dare to disrespect Dr. Thompson Fountain who did the work to earn his doctorate, as Vince Henderson did. Your idol, Skerrltt could only buy the faux doctorates he has and he can’t even tell you what he’s been told to say because of his lack of fluency with the Queen’s English language. You should be ashamed of yourself.

      Hot debate. What do you think? Thumb up 5 Thumb down 3
  7. May 6, 2022

    Another political game by Thomas Fontaine and wants people to believe the shit he says all the time. If these guys were in power they would not have done any better. Thomas Fontaine just keeps playing to the drum beat of the public and people are yet to realize that this guy keeps playing politics every minute of the day in order to score points. Thomas Fontaine is neither a politician nor a smart economist. Right here in America the government is struggling also to keep fuel prices down. Every week the price of fuel keeps spiraling up. What make Dominica any different from other countries? These guys like Fontaine and Athie think that they are the panacea to the problems in Dominica and these guys like IBO and Telemakak just don’t see that. All they see is Skerrit and his Jose Marti award that they are envious about.

    Hot debate. What do you think? Thumb up 6 Thumb down 16
  8. May 6, 2022

    Countries are still scrambling to secure oil purchase as a result of the Ukraine war, that puts a question mark against any stabilization of oil prices. Furthermore any stabilization of oil prices have not yet been realized at the pump as prices keep rising. What I find strange is that Dominica like St. Vincent and St. Lucia reduced fees on oil but in Dominica the price went up instead of decreasing…a bit of fuzzy math perhaps as Fontaine suggest the public needs to see the numbers that were used.

    Well-loved. Like or Dislike: Thumb up 19 Thumb down 6
  9. Informant
    May 6, 2022

    What is most interesting is that Thompson choose not to state to current price per gallon in St. Kitts, which at the last report was higher than that of Dominica even with this latest increase.

    If you want to gain the trust of the people, simply be honest in your assessment. I am certainly not happy to be paying so much at the pump. I don’t think anyone is, but what we need is certainly not another political game here.

    Hot debate. What do you think? Thumb up 11 Thumb down 17
  10. Gary
    May 6, 2022

    Two things that should be noted about the above comment by Thomson, his dishonesty and credibility, these two things are the devil advocate, Thomson The Economist playing Politics, that’s all it is. The dishonesty comes from his ambition to be a Political leader, masquerading as a voice for the people, lol, as to his credibility that has not gone unrecognized with his past actions. What is Thomson accomplishments in South Sudan, working as the Country chief Economist to the Government, did he improve the lives of the people in that Country.

    All the Countries in the region have their economic advisors, all are struggling to handle the current situation differently according to their particular economic condition and needs and Dominica is no
    different or worst https://www.globalpetrolprices.com/Dominica/gasoline_prices/#hl19 Thomson need to stop leaving on the laurels of former International Monetary Fund (IMF) economist Dr. Thomson Fontaine, that’s not what makes a Politician.

    Hot debate. What do you think? Thumb up 7 Thumb down 25
    • Jonathan Y St Jean
      May 6, 2022

      @Gary, right back at you pal. Will you substantiate the negative garbage you took your time to write about the distinguished son of the Dominican soil, Dr. Thompson Fountain? You have gotten so used to instant coffee that you expect all economic interventions to produce instant success. This isn’t like taking performance-enhancing drugs.

      • Gary
        May 10, 2022

        What has Thomson done for Dominica, to be a distinguished son of the Dominican soil, his academic achievements, writing a book. I have never written negative garbage about Thomson, what I have written about is his actions as public figure, Thomson The Politician, all of which can be accessed in the media, what is there for me to substantiate and by the way can you substantiate all the things you have said about the PM stealing state funds and not accounting for it.

        As to your instant coffee scenario and economic activity, that’s just another ludicrous pattern of your thinking. I will leave you with this
        “An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today”.

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