Increased fuel prices have far-reaching effects on island economy

Thursday, March 25th, 2021

Many island residents are concerned about the constant increase in fuel prices in Belize. The recent rise came into effect on March 23rd, with premium gasoline increasing by $1.24 from $10.40 to $11.64 per gallon. Some days before, the price of regular gasoline rose by almost a dollar bringing the price per gallon to $10.92, while diesel is $10.15. Residents are concerned this will reflect in the cost of living, as most of the island’s products are transported via barge from Belize City to San Pedro Town. This transportation comes with a price that is passed on to the consumer. Activists on the island, like Oscar Iboy, think that the government should consider this matter as islanders are still struggling to recover from the COVID-19 pandemic. Iboy, along with a group of other activists, plan on meeting to discuss the issue.

Some transport service providers have increased their rates

While airfares to the islands from the mainland remain the same and some of the taxi services have not reported a rise in their prices, people traveling to and from the mainland via water taxi will now have to pay more. According to one of the water taxis companies, roundtrip from Belize City to Caye Caulker for adults went up to $39 and $20.50 for children ages 4-10. While the new price from Belize City to San Pedro is now $59 roundtrip compared to the pre-pandemic price of $50 for adults and $32 for children. These prices are the result of the recent increase in fuel prices.

Concern in the tourism industry

Tour operators, who depend on fuel to conduct their tours, are also concerned. They believe if prices continue to spike, it will affect their services and subsequently tourism as they may have to increase their rates. According to them, the hopes of making any profit with higher fuel rates will be very minimal. Currently, regular gasoline and diesel are the standard fossil fuels used on the island. The price for a gallon of regular gasoline in San Pedro is currently $11.33 and $10.56 for diesel. These prices are different from the mainland because fuel is barged to the island. There is a possibility that tour, and boat activities rates could increase if there are more fuel increases in the coming days.

Prime Minister explains the increase in prices

The government maintains that the price changes reflect the current demand and supply conditions of crude oil in the international petroleum market. This causes a fluctuation in the acquisition price of refined fuel products.

In an interview with a mainland media house some weeks ago, Prime Minister Honourable John Briceño said the government is facing a financial crisis. He briefly spoke on the commitment with the International Monetary Fund to keep taxes on fuel. These taxes and the proposed salary cut for teachers and public officers are needed to close the $500 million deficit the government currently has.

Briceño hopes to remedy the deficit gap in around two years. Afterward, when the economy is in a better position, fuel could start experiencing a decrease in prices.

Next week is Easter weekend which means a lot of visitors are coming to the island. Residents are looking forward to a business boost; however, they hope that fuel prices do not go up again, negatively affecting their already slim profit margin.



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