Amidst negotiations between the government of Dominica and Rubis West Indies Limited, leader of the opposition United Workers Party (UWP), Lennox Linton, is calling on the administration to reduce the tax burden on the petroleum industry on the island from $3.25 to $2.65 per gallon.
Earlier this month, Dominica News Online (DNO) received and published a copy of a letter sent to members of staff of Rubis, informing them of the company’s decision to temporarily withdraw its services, pointing to a loss of earnings for nearly five years.
Effective September 16, 2021, employees will be laid off for three months as Rubis, which has a network of nine service stations in Dominica, suspend their sale of fuel and await word from the Government which could affect the company’s future on the island.
While speaking on the status of the negotiation on August 27, Prime Minister Rosevelt Skerrit announced that his government will import petroleum if Rubis leaves Dominica, and made it clear that he will not give in to ‘extortionist approaches’ which he alleges the company has taken.
He argued against the $1.76 more per gallon on the price of petrol which he said Rubis is requesting by pointing out that given the price build-up mechanism that determines the wholesale price and the final price at the pump, his government is not paying the company less than what they pay for the gasolene, as they allege in their letter.
The prime minister disclosed that “out of good faith” the government has offered an increase in the in-transit fee as well and an additional offer of 0.23 cents while awaiting the audited statement from the company.
However, according to Linton, the Prime Minister’s response to the company’s struggle to survive “in an increasingly difficult regulated Dominica market”, suggests a looming crisis that all citizens should be wary of.
He said the petroleum products industry in Dominica which involves the importation, storage, distribution and retail of petroleum-based products such as gasoline, diesel, and Liquefied Petroleum Gas (LPG) is 100% regulated by the government, as it should, due to the critical public interest in ensuring affordable and reliable petroleum products to Dominican businesses and consumers and supporting growth across all sectors of the economy.
“The purpose of the regulation, therefore, is not to bleed the industry for tax revenues at the expense of profitable private sector operations. But to justly and fairly deal with the public interest in stable, reliable supplies of petroleum products at the most economic prices to consumers,” the UWP leader pointed out.
Linton further reported that as it stands presently, the Cost Insurance and Freight (CIF) in Dominica is $8.11, while the customs service charge on that CIF value is 25 cents, and the excise tax is $3, to arrive at a landed cost of $11.36.
He said an additional 27 cents are added in the price build-up for storage and distribution as well as a distribution margin at 67 cents which brings the wholesale price to $12.30, plus an added retail margin of 70 cents to come to the retail price of $13 which consumers are now paying at the pumps .
From this amount, $3.25 in taxes goes to the government, however, the distribution margin is 67 cents and the retail margin is 70 cents, Linton informed the poublic.
“The challenge is that both the wholesalers and retailers, with justification, claim they are unable to survive on the margins given to them by the government of Dominica,” the Opposition Leader stated . “This is because Dominica has the lowest volumes in the Eastern Caribbean and these volumes have been significantly depressed further since COVID-19 with the loss of the tourism industry and the restrictions on movements due to COVID protocols.”
He added that the costs for the industry players have not changed and in fact, have in some cases, have been increased pointing to what he said was the drastic cost of power, the pending increase in the minimum wages, and security “costs.
He cited the only beneficiaries of fuel sales on the island as the government of Dominica.
“Yet, the Prime Minister is quite happy to regulate the private operators out of the market by refusing to allow them to make a fair return,” Linton said. “He has also announced that if the fuel suppliers are not prepared to do as he dictates, then the Treasury will purchase fuel for distribution. That means he’s about to nationalize the petroleum industry.”
The opposition leader went on to call for a fair and just margin from the petroleum price to the private operators and proposed a reduction in the tax burden on the industry from $3.25 to $2.65 per gallon.
He further recommended that the government split the yield of 60 cents evenly between the petroleum importers and retailers to move the distribution margin from 67 cents to 97 cents per gallon and the retail margin from 70 cents to $1 per gallon.
“For a government that plans to increase its overall recurrent revenue by 29% this year, giving up 18% of its petroleum tax revenue derived from myopic regulatory practice to ensure that petroleum products importers and retailers are able to continue their tax-generating operations is a no brainer,” Linton said.
He stressed that these operators should not be forced to close operations under the pressure of mounting losses, just so that “some hero” can emerge shortly thereafter claiming credit for solving a problem which Linton believes should have been done a long time ago.
Speaking to DNO Country Manager for Rubis Gas Station Nicholson Dodds, highlighted that though the company which he leads locally is the only one at the forefront “taking the heat” they are not the only company in the industry who is seeking a price regulation.
He declined further comments and noted that the company has taken a position that since they are still in negotiations with the government and hoping for a resolution at this point they will not refrain from making any further public statements.
To my calculations anytime Ugly Lenny, gets involved in someone else business be sure there is a rat in the corridor waiting to hand him a big brown envelope containing money that is the only thing moo moo understands.
A zygote is even smarter than you. You’re solidly DENSE. No wonder the only job you could have hold down in the British Army was scrubbing the toilets. You couldn’t even do a good job at it. You got booted.
Exactly right. A potato peeler in the British army and servant to the officers.
No one thought Kabul would fall to the Taliban so quickly and without a single shot fired. That is a lesson for all of us in believing in ourselves. It should also serve as a warning for all DICTATORS that they too shall flee during their lunch break like Ashraf Ghani- Afghan President- when the people of Dca arise from their slumber. Keep playing Mahzhor and big-boe-tia while we in suck salt but time will tell.
@Bwa-Banday
You must be ……. to think what happened in Afghanistan can happen in Dominica, just try it!
Rubis (really TEXACO) is a multinational corporation, and like all corporations these days the bottom line is profit. Lobbying and pressurising small governments like ours are just typical tactics employed in today’s world by the corporate mafia. Well done PM for having the balls to resist.
I’m with you on this one, multinationals always obscure who they are by using multiple offshoots & subsidiaries. It most times works but looks like PM is on to this one.
Too many vehicles in little Dominica because the price of gas too cheap! I long to ride my Donkey on de Mahaut Street again. I could hardly walk on the road. Too many gas stations and too many vehicles has seriously diminished the quality of life and fresh air in my once beautiful Island. Close dem gasoline station and let’s walk and exercise. See the obesity evolution in Dominica? Some people are 300 – 400 lbs heavy. We could beat the Covid is a very short time if we close 50% of gasoline stations. I cannot even ride my bicycle on the road no more. I used to play cricket in the middle of the road, skipping and hopscotch was a form of togetherness. Strangers and neighbors would skip and sweat and laugh. Now people pass us by in vehicles with dark screened windows as in a twilight zone without knowing who is who. Is life better now? With all these rumbling vehicles and reckless motorcycle riders. Our environment is unhealthy.
I can see regulating dark windows and loud music as most nations do but would u want to go back carrying fig on your head too?
@ just asking, it’s because our roads are overloaded with too many vehicles that’s why we don’t have fig again to export. Do you how long it would take a truck to get to Roseau with a load of banana in such heavy traffic? Every morning from Monday to Friday the traffic from cane field to Roseau is a go slow bumper to bumper. Vehicles moving slower than snails. Think of a farmer who needs to transport three truck loads of fig to Roseau. Too many vehicles are on the road putting pedestrians life at risk. Think about human safety before you talk. 60% of our drivers are inexperienced and reckless. The negative impact of the excess vehicles on our roads are too numerous to mention. The other downside of all this is our roads condition, and oversized vehicles causing traffic jam in Mahaut several times per day.
@ Let’s walk again: You said, “it’s because our roads are overloaded with too many vehicles that’s why we don’t have fig again to export.”
How is there a correlation? When we had fig to export it was then farmers were able to buy new pick up trucks like nothing. The reason why we dont have fig to export is because the Dominican farmers did not ensure consistency in quality at a controlled price. Our market had had enough a decided to purchase cheaper less tasteful bananas from our competitors instead. Why? because at least they ensures a standard quality of product. Like everything in Dominica we believe the “so it is” attitude will get us by. the reason why we have traffic jams is because we do not develop our roads to accommodate increased vehicle numbers. no service lanes for heavy equipment, or sidewalks for walking or, lane for pulling over. Buses stop anywhere instead of only at bus stops and a number of other problems. Its too much one way in one way out in many places.
Isn’t it an anachronism to be writing a donkey for transportation on the streets of Mahaut today?
But is that that have them people pulling away from dominica they have to pay too much in tax and they not making their profit.
“He declined further comments and noted that the company has taken a position that since they are still in negotiations with the government and hoping for a resolution at this point they will not refrain from making any further public statements.”
They will not refrain from making any further comments? So we expect further comments? Let us know and keep up updated please.
However, according to Linton, the Prime Minister’s response to the company’s struggle to survive “in an increasingly difficult regulated Dominica market”, suggests a looming crisis that all citizens should be wary of.
If you have not noticed, jobs are less. Cost of living has risen, and will keep rising. Soon you may see less businesses. Less variety of goods and services. Higher costs. Lower exports of value added products. Lets us see how sustainable and resilient we really are against this storm we are facing.
This victim attitude and emerging hero after have not brought Dominica any good. The Prime Minster must for once put Dominica, not his political ego, first. That attitude prevailed with RUSM, where are we with a replacement medical school after almost 4 years? It is obvious that the Prime Minister lacks both an understanding of macroeconomics and negotiation skills, let someone else lead in that area. One has to know his limitations and inabilities to be a good leader.
You see, Skerrit asks Rubis for an audited statement of accounts but he of all people has no moral authority to ask anybody for audited accounts until such time he can furnish the Dominican citizens with independently audited accounts of the CBI program and his government funded travel and expense accounts. You see Skerrit, what’s good for the goose is good for the gander. I have a strange feeling that your days as PM of Dominica are finally coming to an end. You are loosing it!!
Loved this piece.. informative and makes sense. In light of the pending increase in wages I supposed they made that decision.. hope good sense prevail.
I really hope and pray that you all can come up with a solution to keep the company running.
The man like to play bright but makes absolutely NO SENSE is a good thing Dominicans never took him serious because if mister was PRIME MINISTER of DOMINICA we would FINISH!!! He would not even understand what he getting into, he would just rush and do to please the grey eye men who said they need to recoup their investment…. imagine Lennox saying this:
“He added that the costs for the industry players have not changed and in fact, have in some cases, have been increased pointing to what he said was the drastic cost of power, the pending increase in the minimum wages, and security “costs.
So he advocated for an increase in minimum wage claiming everybody in Dominica was working for $4.05 now he is complaining on behalf of Rubis that the pending increase in Minimum wage which is $7.50 is creating cost issues?? So if he was PM what would he have done? I REALLY WANT TO KNOW HONESTLY BECAUSE HE DID PROMISE HE WOULD HAVE INCREASED IT TO NO L;ESS THAN $10 PER HOUR LMFAO!!!!
its amazing how Dominicans think. I personally think Lennox is making perfect sense. Anyone who has done some kind of economics, or has an understanding of how business really works should have expected that the cost of living would rise to offset a rise in wages. The issue is that the petrol industry is regulated by the government. government get their cut of the taxes before the fuel even reaches the pump. Already the government was getting the majority of the profits and leaving the crumbs to the wholesalers and retailers. Now with higher wages to pay, how can they continue to operate. The government MUST lower its tax rate. for ALLLL private petrol providers to be sustainable businesses. Skerrit nationalizing petrol now is absolute chaos. he asking for more problems than he anticipated. So to counter what you were just laughing at him for, he is suggesting a lower tax and a shared cost. this will result in increased sales and more profit. for both.
I have serious problems with Lennox, it tells me if he was Prime Minister he would have run down Dominica to naught!!!!! here are some take away from his statement i need clarification, and i am still wondering who wrote that statement!
1. “This is because Dominica has the lowest volumes in the Eastern Caribbean and these volumes have been significantly depressed further since COVID-19 with the loss of the tourism industry and the restrictions on movements due to COVID protocols.” GIVE US THE QUANTITY eg Grenada 3m gallons per day, Dominica 2.9M per day etc. BTW COVID Protocols affects ALL gas stations in the region.
2. The opposition leader went on to call for a fair and just margin from the petroleum price to the private operators and proposed a reduction in the tax burden on the industry from $3.25 to $2.65 per gallon. WHAT IS THE LOSS IN REVENUE, AND WHAT WILL REPLACE SUCH LOSS?
I HAVE A LOT MORE QUESTIONS BUT I NEED TO WAIT FOR A PRESS CON TO ASK HIM PERSONALLY!!!!! SMDFH…
@JOE LINTON, since you want Linton to furnish you with the supporting figures including from the region though you might also be interested in having Skerritt supply the necessary figures he consulted to arrive at his offer to Rubis. Then we can compare and see who’s proposal is the better option for the struggling economy and the hard pressed petroleum sector.
Omg not you Ugly Lenny, please keep our of it and let the government and Rubis do the talking your interference is just a smoke screen to let your supporters think you have some spurm left by trying to advise the Government on tax reduction in the petroleum industry concerning Rubis, or is it possible you getting something out of it?
If the PM had made the same recommendation, you would be glorifying his name hypocrite
Linton is at it again, without no knowledge of how Government arrived at the cost of gas he saying how much it should be sold for, so irresponsible.
This Government cannot run the Country. They just cannot. Everything is failing under their watch. They are grappling at straws and still failing. O Dominica what have become of you.
That’s the unmitigated truth. Everything under Skerrit’s control crumbles. Here are just a few examples!we.
*banana industry *sports * public library. * feeder roads * manufacturing * treasury * entire economy * public service * electoral & judicial systems . Even the National Birds didn’t escape the radishes of Skerrit’s destructive stewardship. Imagine that!
Dominica will be reduced to rubble under the continued juvenile!e, ruinous and annihilatory mismanagement of the most unqualified head of government in the Caribbean and probably in the world.
@My name, what the hell do you know about running a country, you could not run a tap or make your bed in the morning shut your cake hole.
Dog Meat Eater, you like to curse people questioning their intelligence. You often boast how you were a member of the British military.
At first, I summarily dismissed your claim knowing that you have serious problems reading, writing and spelling. After doing some research, I found out you were telling the truth.
The army wanted someone to mop the floors and clean the toilets. What a perfect person for the job.
😂😂😂😂🤣🤣🤣Very funny I likey!
The man they say that is a prime minister and minister of finance couldn’t give a proper explanation like that. Instead he tried to play politics by trying to give the impression that Rubis want to raise price of gas. The man is so unprofessional. You said you still negotiating with them so why come and belch all those garbage without stating how much government is receiving for doing nothing while the oil companies take all the risk and do all the work. You don’t have employment on island you not creating employment yet still you want a big company to go. I hope Dominicans see now that was the same arrogant behavior which caused Ross to depart.
Finally a sound mind. And that is exactly that. they are simply collecting taxes. Not doing a damn thing but waiting for next month to collect more. meanwhile, the private companies struggle with what is left on the table and still have administrative expenses to deal with. Government is supposed to make operating in Dominica easier not harder in an attempt to enrich itself.
I “ve spoken to at least one business person who owned a service station a few years back. He revealed that selling fuel alone you cannot break even you would operate at a loss. That’s the reason those in the petroleum industry have to sell so many other products and offer other services.
I listened to Mr. Linton’s entire argument on the present Impasse between government and the proprietors in the petroleum industry. Well reasoned.
Skerrit, on the other hand, has no education in finance, economics nor business. The man is a blank slate. He has no idea what he’s doing. He’s like a baker in an operating theatre trying to perform surgery. There can’t be any good outcomes.
Any impartial observer would tell you that on this issue Mr. Linton is scholarly while Skerrit looks amateurish and recalcitrant.
Mr. Skerrit reminds me of a school.yard bully playing cricket. When he gets bow!ed he knocks over the stumps with the bat and walks off with the ball.
I believe Lintons points are well thought out. Also in line with the reasoning of the suppliers who themselves are willing to compramise to have a win win situation that makes sense. But you know how greedy people are. Its hard to negotiate food with them.