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HOME	OCTOBER 01st, 2005

Deputy Prime Minister and Minister of Energy, Gregory Bowen has appealed for understanding from the Grenada Trades Union Council (TUC) as the country attempts to grapple with the rising fuel cost.

The senior government minister announced at a news conference last Friday that the price of a gallon of gas will cost vehicle owners $10.89 with effect from October 1. This represents an increase of $3.39 a gallon from the old price of $7.50.

Bowen told reporters that government is aware of the impact the price of gas and its related products will have on the overall reconstruction taking place on the island. He admitted that the costs of several consumer items will go up, adding that this is no reason for trade unions on the island to demand major increases in salaries for workers from their employers.

"Employers will feel the pinch when workers ask for an increase. I hope that the Labour Unions will not go out there and ask for huge amounts of money that can cause some businesses to close down", he remarked.

Bowen, who is also this country's Agriculture Minister, said he believes the new increase in fuel prices can also have the potential to undermine the country's development and pose a threat to unemployment.

He conceded that the high cost of gas will undermine "in a harsh way" the general recovery taking place in the country in the aftermath of the widespread destruction caused by hurricanes Ivan and Emily in the past year.

He said the government has already been placed in a situation where it cannot collect some taxes as the country negotiates with its creditors for debt restructuring. Bowen is warning that there could be additional price increases on oil and its by-products within the next two weeks if the price does not stabilise on the international market .

"There may be monthly increases in the price. We have to start at $10.89, we don't want it to go to $11.85", he said. "If the situation does not improve by the ending of the year then government will have to look towards taxation to keep the cost down", he added.

According to Minister Bowen, the reality of the situation is that if oil is landed in Grenada at around $11 then government will be left with no choice but to add an additional $1.85 and as such the price of the fuel will go up again to around $12.85 per gallon.

"So the worse case scenario is that it (gas price) could reach $13 to $14", he warned. The Energy Minister said that if the price of oil goes down then the price could be stabilised locally at $11 and $12 per gallon.