Fuel Prices Set to Rise as Government Says Subsidy Is No Longer Sustainable

Prime Minister Gaston Browne says an increase at the pumps is expected early this week, although he has pushed back against a recommendation for a larger adjustment.

Motorists in Antigua and Barbuda are expected to pay more for gasoline and diesel from early this week as the Government scales back a costly fuel-price subsidy.

Prime Minister Gaston Browne said the administration had kept prices at the pumps unchanged in the hope that international pressures—particularly the conflict involving Iran—would ease. Instead, he said, the situation has persisted and global oil prices have begun climbing again.

According to Browne, the Government ordinarily collects about EC$3 million to EC$4 million monthly in petroleum-related revenue. Over roughly six months, he estimated that about EC$24 million in expected revenue had been forgone, while at least EC$15 million had also been paid to West Indies Oil Company to maintain the existing retail prices.

He warned that continuing at the present rate could expose the Treasury to losses approaching EC$100 million within months if international prices remain elevated.

The Ministry of Finance recommended an increase of EC$3.50 per gallon, Browne disclosed. He said that was too sharp for consumers to absorb at once and indicated that the Cabinet would consider a maximum increase of about EC$2.

The Prime Minister said the adjustment would still leave local pump prices below the regional average, which he placed at more than EC$18 per gallon. He cited possible prices of approximately EC$16.50 and EC$16.25 for diesel and gasoline respectively, subject to the final decision.

Browne described the impending increase as regrettable but unavoidable for a small developing state with limited fiscal space. He said the Government had tried to protect consumers for as long as possible but could no longer both surrender petroleum taxes and pay suppliers to hold prices down.