Subsidy to be phased out in 2012 says PM Douglas
BASSETERRE, St. Kitts – FOR more than a year the subsidy which was being paid on Liquid Petroleum Gas (cooking bas) by the government has been removed, and since then the Sugar Industry Diversification Foundation (SIDF) has been footing the bill.
As explained by Prime Minister and Minister of Finance the Right Hon. Dr. Denzil L. Douglas, the Federal Government ceased paying the subsidy either last year or the year before.
Removal of the subsidy would have meant that the price the consumer would have had to pay for LPG would increase. However, according to Dr. Douglas, who spoke on the issue during his January 25 press conference, the government understood that an increase in the price of LPG would have a ripple effect, causing the price of several other goods and services to likewise increase.
Therefore, the assistance of the Foundation was solicited to absorb the $3M-per-annum bill.
“The subsidy has been removed…for the whole of, I think, 2011 and maybe 2010. It has been removed. The subsidy is no longer provided by government. It is the SIDF that has been providing the subsidy for all of the people of St. Kitts and Nevis.
“So, when people go out there and they are knocking the SIDF, they don’t even know the good that the SIDF has been doing. The subsidy has been removed but we have found a way. We have worked with the SIDF asking them to really come onboard to really assist the population because if the price of gas (LPG) was to go up, then so many other things would go up and we really don’t think we can afford it at this time.
“So, we’ve spoken with the people of the SIDF…I am almost certain it’s $3M per annum. I am almost certain, but I can check it.”
During his 2012 Budget Address, Dr. Douglas had indicated that the subsidy amounts to $4M per annum, noting that it could not continue ad infinitum.
“And we will begin to phase this out from 2012” which suggests that the price of LPG is likely to increase during this year.
And as Dr. Douglas explained during the press conference, he recently discovered that St. Kitts and Nevis is the only country in the Caribbean that has not passed on the LPG price increases to consumers.
“…I was sitting in a Monetary Council meeting last year at the Central Bank and it was only then I realised this is the only country that has not passed on the increases in LPG to the customers. The only country in the whole Caribbean; our little darling St. Kitts and Nevis!
“…Every other country reporting at the Monetary Council meeting there a few months ago said that this thing has been passed on long time. But we have worked (an) arrangement with the SIDF to have them provide the subsidy so that the government still can collect revenue that is required at this particular time.”
