There were long lines at some gas stations across the Corporate Area, including this Total gas station at Heroes Circle yesterday, as motorists anxiously tried to stock up on petrol before anticipated increase in fuel costs. - Peta-Gaye Clachar/Staff Photographer

The Jamaica Gasolene Retailers Association (JGRA) has backed down from its previous opposition to a tax on petroleum, saying it understands the financial dilemma in which the Government finds itself.

Finance Minister Audley Shaw yesterday announced that an $8.75 levy would be placed on each litre of petrol sold. This, he said, comes into effect as early as Monday.

Despite fervent opposition to the proposed tax in earlier weeks, JGRA head Trevor Barnes told The Gleaner yesterday that "it is what it is" and that the association, as well as all Jamaicans, would have to accept the Government's decision.

"We understand the predicament the Government, and indeed the whole country, faces, therefore, we would have to call on our members, customers and the whole country to try our best to ride out these difficult times," Barnes said.

High increases

The JGRA had previously disagreed with the gas levy, arguing that it would undoubtedly cause high increases for gas station operators, as well as consumers. The association had previously proposed that the Government use the money collected on temperature adjustments which, he said, could yield $1 billion per year for the Government.

"That would have been totally insufficient because the Government needed much more than that, so we just have to work with it," he said.

Barnes said he accepted that it was clearly a situation of "give and take", as he pointed to the Government's announcement that the income tax threshold for PAYE workers would be doubled.

"We know it (the tax) will have a ripple effect in the economy but we understand that it is trying times, it's a matter of choices. What else is there to be done?"

Anticipating Shaw's announcement, late yesterday afternoon numerous Jamaicans went scampering to stock up on petrol.

There were long lines at some gas stations across the Corporate Area up to late yesterday evening. Attendants at a gas station in downtown Kingston said they were out of gas from as early as 5 p.m.

While many motorists scurried to gas stations to enjoy the few remaining days of current prices, executive members of the Hackney Carriage Association were huddled in an emergency meeting strategising a response.

While the ripple effects of the Government's special consumption tax on fuel will be far-reaching, little doubt exists that the immediate pinch will be felt by taxi operators and other motorists.

Fare increase

Declining to commit to the route the taxi association might take, Willard Costley, president of the Hackney Carriage Association, said no option has been taken off the table, including asking the Government for a fare increase.

At the same time, Phillip Fearon, managing director of On Time Taxi Service Limited, lamented the Government's gas tax.

"That's not good for taxi persons or the passengers out there," he said.

"We will have to watch and see if travelling around will be affordable."

Fearon argued that taxi operators, many of whom labour through a 12-hour workday, would not be able to absorb the $8.75 per litre cess that comes into effect on Monday.

"They (taxi operators) barely making anything right now. The profit margin is small and they have to work long hours," he said.