ST JOHN’S, Antigua – Prime Minister Gaston Browne has told Antigua and Barbuda to brace for increased prices for goods and services as oil prices soar past US$100 a barrel as a result of Russia’s invasion of Ukraine last week.
Prime Minister Gaston Browne (file photo)Oil prices jumped on Monday as Western allies imposed more sanctions on Russia and blocked some Russian banks from a global payments system, which could cause severe disruption to its oil exports.
Brent crude rose US$4.82, or 4.9 percent, to US$102.75 after reaching a high of US$105.07 a barrel in early trade.
“Now, I believe that within the last few days petroleum prices are about US$100 per barrel and potentially it could get up to maybe US$120 within the next week or two, especially if this conflict continues,” Browne said.
“So, there is the implication of potentially where we have been subsidizing the pricing and would have kept the pricing of petroleum products stable for the last few years, we could have a situation where we are forced to increase the price at the pump.”
Prime Minister Browne told listeners to his radio program that the economic fallout which could arise out of the emerging conflict could mean that his administration may find it much more difficult to protect consumers from high prices at gas station pumps across the country.
“If petroleum prices continue to increase, then there may be a time when we cannot continue to hold the price of EC$12.50 (One EC dollar=US$0.37 cents) or whatever it is for gas and then in that case, they may have to be a pass through at some point.
“Again, the whole idea is to reduce the price at the pump but if it gets to the stage in which the government consumption tax is totally wiped out and then it’s going into negative ground then we may have to pass on the increase in price to consumers,” he said.
“Petrol and food, those contribute to co-inflation and the thing about it is that these increases in those prices affect the poor disproportionately and that is why Antigua and Barbuda has had this price equalization mechanism in place to control the price at the pump.”
Prime Minister Browne told listeners that larger countries tend to throw democracy out of the window due to sheer power and size of both land mass and economy.
“We have to be careful not to get involved in their rhetoric but at the same time stand on those principles that will defend our interests. These powerful countries, whenever it is convenient for them, they speak about defending democracy but whenever they believe their so-called national interest is at stake, then might becomes right and that is precisely what is happening right now in Russia,” he said.
