Tighten your belt
As expected, fuel prices will go up again Friday, as a result of the ever-rising oil price on the international market. The increase by no less than 30 cents per litre of gasoline and per litre of diesel fuel is sure to be felt by motorists as well as bus and taxi drivers.
No only that, but practically all businesses will be dealing with increased transport cost that will no doubt be passed on to the consumer. The fuel price increase will also lead to higher energy bills, which have already gone up considerably in the past year.
In addition to all that, the increase of the prices of cooking gas and of kerosene will hit households directly when it comes to preparing food. The increase in the price of kerosene or jet fuel will again make flying to and from the island more expensive as well, with all possible consequences for the tourism economy.
It’s the second time in little over a month that the gasoline price has gone up, totalling an increase of no less than 50 cents per litre, and there appears no end in sight. One thing motorists can do is to car pool and/or limit car use to what is strictly necessary, avoiding so-called “pleasure rides.”
Up to now there has been little word from government about measures to mitigate the consequences of the increase in the cost of living or to soften the blow for the less fortunate. That is understandable in a sense, because at the end of the day someone has to cover the increased cost, most of which is a direct result of developments abroad over which the island has no control.
The Executive Council has asked the Central Government to decrease the excise tax on fuel, exempt certain basic food items from the turnover tax and make the turnover tax 100 per cent deductible from the profit tax, to give businesses room to absorb some of the price increases. It is part of a package that also includes increasing the turnover tax to four per cent, so the island territory can get a share of two instead of one per cent.
While the first three ideas are worth considering, moving ahead with a turnover tax increase does not appear advisable at this time, taking into account the effect on already rising consumer prices. In any case, because the turnover tax is levied on the total income earned, higher prices should actually produce more revenue for the Central Government as well as St. Maarten.
In Curaçao the Executive Council said it would ask the Central Government to increase the minimum wage by five per cent and would adapt the old age pensions and unemployment pay. It also increased the bus tariffs, but the bus drivers are fighting that because they say the people can’t afford it and blame the bus drivers.
In St. Maarten the bus tariffs were already increased recently, while the minimum wage went up not too long ago and is currently higher than that of any other Antillean island. Considering the extra expenses the Island Government is incurring to prepare for the constitutional changes and the intention to increase its revenues by adapting the turnover tax, it seems obvious that there will not be much financial space for subsidising prices locally.
The fact of the matter is that no one can escape the consequences of the energy crisis. What people need to do is budget, economise and prioritise their expenditures.
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