KSAMC oil hedge tax resolution rejected

A resolution for the Kingston and St Andrew Municipal Corporation (KSAMC) to call for the government to immediately remove the hedge tax on fuel was defeated at today's monthly council meeting. 

The resolution had further requested that if the government is not inclined to completely remove the hedge tax, that it be suspended indefinitely until the economy and the living

conditions of ordinary citizens experience reasonable improvement. 

Twelve councillors voted in favour of the resolution, while 21 voted against it. 

The resolution was moved by councillor for the Vineyard Town Division, Andrew Swaby, and seconded by Eugene Kelly, the councillor for the Whitfield Town Division. 

In the one-page resolution, the councillors said Jamaica introduced the hedge tax in 2015 to provide resources for the government to purchase oil to insure against future spikes. 

They explained that the funds were only used once in 2015 to do hedging and that the government has missed several opportunities to do hedging that would benefit the country, the last being when the price of fuel was reduced to below US$20 per barrel in 2020. 

The councillors reasoned that though the removal of the tax would not be an ultimate solution, it would alleviate some of the challenges being experienced by Jamaicans. 

“The current price of oil has exponentially risen to almost US$100 per barrel and is expected to further increase due to the current war in Eastern Europe. It is immoral and unconscionable that the government is collecting approximately $7 billion per annum from the hedge tax and does not provide the public with any practical benefit,” the councillors reasoned. 

In their contribution to the debate, Duane Smith, the councillor for the Chancery Hall Division, and Venesha Phillips, the councillor for the Papine Division, questioned where the government would get that $7 billion in revenue annually if the hedge tax was removed. 

“The reality is that we cannot afford as a country to have any source of revenue abandoned at this time. We are all feeling it. I pay $20,000 to fill my tank and I know everyone is facing the burden,” Phillips said.

- Judana Murphy

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