Government says it has absorbed EC$11.85 million to keep fuel prices lower

By S.Browne and Admin. Updated 5:15 p.m., and 5:30 p.m. Thursday, July 2, 2026, Atlantic Standard Time (GMT-4).

The Government of St Vincent and the Grenadines has effectively absorbed EC$11.85 million under the country’s bonus-malus fuel pricing mechanism to cushion motorists and businesses from the full impact of rising international oil prices, Prime Minister Dr Godwin Friday told Parliament on Thursday.

Responding to a question from Opposition Leader Dr Ralph Gonsalves, Friday said the net figure represented the amount the Government had effectively borne by keeping regulated fuel prices below the wholesale cost paid by importers.

“I want to do it as a total between Sol and Rubis. The amount that the government owes is, to the companies in total, $11,854,070.45,” Friday said.

He explained that the figure reflected the difference between the amount owed to Sol EC Ltd and the amount still payable to the Government by Rubis.

“This is, of course, because we owe Sol $15 million and Rubis still has, in a sense, a credit of $3.1 million.”

Friday said the net amount represented the Government’s effort to shield consumers from the full effect of higher fuel prices.

“That $11.8 million, effectively, is what the government has been holding the price down, in a sense, and subsidising the public,” he said.

The Prime Minister explained that the bonus-malus mechanism is a long-standing arrangement between the Government and the country’s two approved fuel importers covering dutiable sales of gasoline and diesel. Aviation fuel and liquefied petroleum gas (LPG) are excluded from the arrangement.

Under the mechanism, the Government regulates wholesale and retail fuel prices. Where an importer’s wholesale cost exceeds the regulated price, the Government reimburses the difference through a “malus”. Where the wholesale cost falls below the regulated price, the importer pays the difference to the Government as a “bonus”.

Friday told Parliament that, as at April 30, 2026, the Government owed Sol EC Ltd EC$15,022,621.67, while Rubis had EC$3,168,551.22 payable to the Government.

He said the increasing liability reflected continued volatility in international oil markets.

“The realities of the international economic and trading situation with respect to oil creates continuing hardship for us, as a government, to absorb the increases indefinitely,” he said.

He added that the Government had deliberately chosen not to pass the full increase in fuel costs on to consumers.

“During that time, the government essentially passed through a portion to the consumer but also held back so that the overall cost would not be too onerous on the public,” Friday said.

The Prime Minister also told Parliament that bonus-malus statements for May and June had not yet been verified and were therefore not included in the figures presented to the House.

During a supplementary question, Gonsalves sought information on the benchmark wholesale price used by the Government in setting fuel prices. Friday declined to speculate on future liabilities, saying the Government would make “a facts-based decision” once the relevant information for May, June and July became available.

On June 29, fuel prices – gasoline, dieselene and low sulphur dieselene rose again, the second time in about a month.

The maximum retail price of gasoline increased from EC$16.92 to EC$18.31 per gallon, an increase of EC$1.39. The maximum wholesale price at bulk installation rose from EC$16.16 to EC$17.55 per gallon.

The maximum retail price of dieselene moved from EC$16.26 to EC$17.53 per gallon, while the wholesale price increased from EC$15.60 to EC$16.87 per gallon, representing increases of EC$1.27.

Meanwhile, low sulphur dieselene increased from EC$16.40 to EC$17.40 per gallon at the retail level, while the wholesale price rose from EC$15.74 to EC$16.74 per gallon, an increase of EC$1.00.

The latest adjustment came just over a month after the government implemented substantial fuel price increases on May 28, when gasoline prices rose by EC$3.70 per gallon, dieselene by EC$3.70, and low sulphur dieselene by EC$3.47.

At the time, Prime Minister Dr Godwin Friday said the government had delayed raising fuel prices for several months despite sustained increases in international oil prices. He also announced temporary measures, including reductions in excise tax and a 50 per cent cut in the customs service charge on imported petroleum products, to cushion consumers from what he said would otherwise have been even steeper increases.

Dr Friday had stated that, without those interventions, gasoline prices would have risen to approximately EC$18.82 per gallon, while diesel prices would have exceeded EC$17.70 per gallon.

The new prices with gasoline now retailing at EC$18.31 per gallon, brings pump prices closer to the level the Prime Minister had previously indicated would have been reached without government intervention.

END