Customers of the Jamaica Public Service (JPS) should not see any increase in the fuel component of their energy bill despite the increase in the special-consumption tax (SCT) on fuel.

In addition, electricity bills, like water bills, will also remain exempt from general-consumption tax (GCT).

The increase in the gas tax will also have no impact on the price of cooking gas.

Finance Minister Audley Shaw announced an $8.75 cents increase in the price of each litre of gasolene on Thursday, sparking fears that Jamaicans would be paying more at the pumps, in addition to increases in electricity bills and the price of cooking gas.

But yesterday, Shaw moved to allay the fears as he faced journalists who had questions about the $18.1 billion dollar tax package which he had announced.

"The tax on fuel does not affect electricity, the bauxite industry, the aviation industry and it does not affect the liquid petroleum gas industry," Shaw said.

He also downplayed reports that the increased gas tax would have a major impact on inflation while driving up prices in the transport sector.

According to Shaw, the Government expects some upward movement in prices, but the increase in the SCT should not lead to any significant movement in inflation.

The finance minister noted that the Government had projected inflation for this fiscal year at between 11 and 14 per cent and argued that this included provisions for any price hike related to the increase in the SCT.

Responding to concerns that the gas tax could lead to increased public-transportation costs, Shaw urged taxi operators not to hike their prices.

Reasonable decision

He argued that the increase in rates approved last year was granted at a time when gasolene was selling for more than $80 per litre.

According to Shaw, since then, the price of gas has come down, but the taxi operators have not been asked to lower their fares.

"We expect the taxi operators to absorb the increase as a result of this tax. It is fair. It is a reasonable decision because nobody asked them to give back anything because of the drastic decrease in the price of fuel.

"So it's only fair and reasonable that we should ask them to hold strain in the light of this increase," Shaw argued, even as he accepted that he was powerless to prevent the taxi operators from hiking their fares.

Shaw's appeal was met with caution by members of the Hackney Carriage Association.

"We are going to meet on Sunday to discuss the gas tax, but we are aware of the challenges facing the country and will act accordingly," Willard Costley, president of the association, told The Gleaner.

arthur.hall@gleanerjm.com