by Linda Straker
- Freight rates to be capped at 2019 level beginning October 2022
- PM Mitchell believes that governments must always put citizens first
- Proposal review will be conducted close to end of period
The Government has announced that it intends to cap freight rates at the 2019 level for 6 months beginning October 2022 and has called on the business community to do the right thing and pass on the saving to consumers and end users of imported goods and products.
“The Government intends to take to the Cabinet for approval next Monday the caping of freight rates back to 2019 levels for 6 months. The intent is to ask Cabinet to approve a request by the Ministry of Finance to have customs duties and other associated charges, charged not at current 2022 rates but at the rates that existed pre the onset of Covid-19,” Prime Minister Dickon Mitchell announced during a government news conference on Tuesday, 6 September 2022.
“You will recall that the Government indicated or this administration indicated during the campaign that was we to be given the opportunity, one of the things we will seek to do is whether we could temporarily ease the cost of living challenges that citizens face given the rising cost of goods, particularly arising from inflation on the world market as well as the dramatic increase in freight charges which our importers had to bear,” he said. A proposal review will be conducted close to the end of the 6 months.
The Prime Minister said that Government will be losing revenue, but it is a justified loss in the interest of the citizens. “The projection indicates that the Government will be losing significant revenue as a result of that, as much as EC$4 million. We appreciate that it is not an easy decision to make for the Government.” PM Mitchell believes that governments must always put citizens first.
“We recognise that Government but first be about the citizens and the challenges and the challenges the citizens face and all governments are at this time are taking measures at least on a temporary basis, until inflation gets under control and until freight prices are stabilised and decrease,” he said. “The intent here and I want to stress this, particularly for the business community, if the Government takes a decision to cap the freight rate back to 2019 level, we expect that the business community will do the right thing and pass on those savings to the consumers.”
“This measure will only be of benefit particularly to the citizens and the final end consumers if the business community does the right thing. We have heeded the call by the business community to in fact cap the rate at 2019 levels,” he said.
Prime Minister Mitchell also announced that the Ministry of Finance will seek to remove the gas and diesel cap announced by the former New National Party (NNP) in December 2021 and remove that 25% reduction in non-fuel charges on electricity bills. He said that Grenlec, the only electricity company, has lost EC$11 million over the past 9 months due to the removal.
That sounds like trickle down economics. Remove the direct benefits that people can feel on a daily basis, give it to business and hope that they pass it down to the people. Not in Grenada when they are charging people 3-4 times the landing cost of goods. It will be an opportunity to make more profit.