ST GEORGE'S, Grenada (CMC):

Energy Minister Gregory Bowen has announced an increase in petroleum products effective yesterday.

He said the 17-cent increase would enable the government to implement a new pricing system that will be adjusted according to prices on the world market.

The Petroleum Tax Act was pending implementation following approval in Parliament last June, and effective October 1 petroleum dealers will be bound by the provisions of the act.

He said the government would impose a flat tax of EC$3.00 (US$1.10) on imported gasolene and diesel and customers will experience a fluctuation in prices at the pumps.

"With the figure of EC$11.06 (US$4.09), the government will be collecting its EC$3.00 and the retailers and wholesalers will be realising their margins," Bowen said.

"All we need to do is respect the act but at the same time eliminate the shock from the consumers".

New prices

Under the new pricing structure, gasoline will be sold at EC$11.06 and diesel at EC$10.66 (US$3.94) per gallon.

Bowen said the new prices which went into effect on Sunday would also ensure that government does not sacrifice its revenue take in the wake of continuing high price scenario.

"The continued existence of artificial retail prices at the pumps cannot remain. The government is in no position to subsidise such prices, and must ensure that the marketing companies receive their guaranteed margin".

The minister said the new pricing system would be monitored regularly to make future adjustments and implementation more harmonic and seamless.