IMF Resident Representative to Jamaica, Dr. Constant Lonkeng Ngouana, says rolling back the taxes on petrol would not be a good move at this time.
There’ve been calls recently for the government to reduce the Special Consumption Tax, SCT, on fuel, in light of record high fuel prices.
The SCT was raised in 2015, in part to pay for a 3-billion dollar oil hedge, which would’ve helped protect the country from high oil prices but was never triggered.
Last year, the Andrew Holness administration decided not to renew the hedge.
This has prompted calls from the Opposition to roll back the tax. But Dr. Ngouana says the government needs the tax revenues to bring down the country’s debt.
Dr. Ngouana says the high cost of hedging oil has to be considered when making a decision on whether to pursue it.
He says the government should focus more on economic growth so that people’s income increases and they can better afford higher gas prices.