~ Aim is relief for consumers ~
PHILIPSBURG--Government is looking into the possibility of granting exemptions on the Turnover Tax (ToT) on the purchasing of fuel and renegotiating the Seven Seas contract in an effort to secure more favourable utility rates for consumers.
The main goal is to offer relief to consumers burdened by high fuel costs. Prime Minister Dr. Luc Mercelina alluded to these possibilities in response to questions posed by National Alliance (NA) Member of Parliament (MP) Darryl York during a “Question Hour” in Parliament on Monday. Amongst other things, York asked the Prime Minister what specific financial relief measures will be implemented for residents and businesses, and what is the expected timeline for their implementation.
Mercelina acknowledged the financial burden posed by the increasing utility costs. He outlined a comprehensive approach government is taking to address the issue. “We are undertaking a comprehensive evaluation of the electricity and water tariffs, with a primary focus on the fuel clause,” he said. “Our first focus is, of course, the reduction of the fuel clause. Ongoing analysis is being conducted to verify the validity and also the reliability of the fuel clause.”
Government is also focused on exploring changes to the tariff calculation formula to ensure that fuel costs are more accurately aligned with real consumption and will do an assessment of international fuel price benchmarks to identify any opportunities to lower costs for consumers.
The second focus is regulatory oversight and transparency. “This we want to achieve by establishing an independent review process to access and validate tariff calculation. Secondly, implementing regulatory safeguards to ensure that changes in fuel and operational clause costs are transparently reflected in consumer pricing and our third focus is base rate assessment. A high-level evaluation of base electricity and water rates is being conducted to determine whether existing rates are fair and sufficient to cover costs without overburdening the consumers,” said Mercelina.
He outlined the expected timeline for these measures, noting that the analysis of the fuel clause and fuel price benchmarking should be completed by the end of the first quarter of 2025. By the second quarter of 2025, government aims to finalise a recommendations report regarding tariff calculations and regulatory safeguards.
Additionally, government is also looking into granting exemption on, for example, the ToT for the purchasing of fuel and the renegotiations on the contract with Seven Seas for a more favourable rate for consumers.
Mercelina later explained that these are just options to evaluate. Government is first awaiting a report being prepared by Bureau Telecommunications and Post (BTP). “At this point, these are just preliminary ideas that we are considering in case the BTP report includes suggestions to assist with the fuel clause. Once we receive the report, we will do everything we can to reduce the fuel and energy prices that consumers are currently facing,” he said, in response to a clarification question.
“It's important to note that the Ministry of Finance has not yet started, as we are waiting for the definitive report and recommendations. However, we are flexible and aware of the challenges people are enduring due to the high energy prices.
“The entity handling this for the government of St. Maarten is the Bureau Telecommunications and Post (BTP), which is collaborating with BTP Curaçao, now known as RAC (Regulatory Authority Curaçao), the regulator in Curaçao. Given the strong relationship between BTP St. Maarten and BTP Curaçao, both parties decided to work together on this matter. Curaçao had already included this in their activities, though under the new name, RAC,” he said.
After a follow-up question from York, Mercelina said multiple stakeholders contribute to the fuel clause, which became difficult to navigate. He likened the situation to a “tangled fish line.” He explained that it had taken time to untangle the complexities and understand the various partners involved.
These stakeholders include SOL as the primary contributor, followed by Seven Seas, GEBE, Port St Maarten, and three government ministries: The Ministry of Finance, which analyses contributions and approves tax exemptions; the Ministry of General Affairs, which handles regulations; and the Ministry of Tourism, Economic Affairs, Transport, and Telecommunication (TEATT), responsible for supervision. Mercelina clarified that the fuel clause involves these five partners.
https://www.thedailyherald.sx/islands/gov-t-looking-into-tot-exemptions-on-fuel-purchase-renegotiation-seven-seas-contract
