The new 15 per cent increase at the fuel pump for diesel is just the start.
The cost of fuel will continue to cost you more.
Finance Minister Colm Imbert revealed Monday that he plans to fully remove the subsidy on diesel in three years.
Imbert last Friday jacked up the cost of diesel from $1.72 to $2 a litre.
He argued on TV6’s Morning Edition on Monday that the fuel subsidy does not achieve the purpose for which it was intended.
The subsidy “helps the rich,” he stated.
He repeated his claim, initially made last Friday, that rich people save up to $3,000 a month through the subsidy.
In contrast, poorer people save an average of $500 a month, the Minister said.
He asked rhetorically: “Is this the best way to spend $4 billion?”
At times of high oil prices, the national subsidy amounts to around $4 billion a year, he stated.
Imbert also said there are plans to cut back on the Government Assistance for Tuition Expenses (GATE) programme.
He stated that the programme had achieved its purpose of increasing tertiary enrolment to 60 per cent of students.
He also claimed that there were now “professional students” as a result of GATE.
The Minister said a committee was now reviewing the programme and a new means test will be introduced in time for the start of the next academic year, in September.
The GATE incentive would target the country’s development needs, Imbert said.
Asked about the incoming tax on online purchases, the Minister there are on-going discussions.
He said one measure could be for the tax to be collected by commercial banks that issued the respective credit cards.
He noted that the current air traffic tax is collected by airline companies.
He spoke of plans to diversify the economy into the services sector, and identified the maritime business as one area of focus.
Other plans include the introduction of Asian banks and assistance to manufacturers to penetrate the Latin American market.
He said he expected improved national tax collections.
The Minister stated that if the price of oil does not improve he will consider reducing forthcoming national budgets to $55 billion.
The current fiscal package has been slashed from $63 billion to $59 million.
The Government expects to raise $44 billion in revenues.
There will be increased reliance on long-term borrowings, he said.
But he noted that experts are forecasting that the price of oil will rise to between US $50 and $55 a barrel.