Nov. 22, 2005 —— A reduction in the fuel tax paid by local gasoline vendors may soon translate into savings at the pump for consumers. Starting Monday, gas stations in the Virgin Islands are asked to change their pump postings to reflect a 50 percent fuel tax cut —— from 14 cents to seven cents.
"This means that the vendors will now be paying less for gas, and should hopefully be transferring that savings onto the customer," Andrew Rutnik, commissioner of Licensing and Consumer Affairs, said when contacted last week.
The tax cut was supposed to go into effect last Friday, but Rutnik said a dispute between wholesalers and retailers kept anything from happening. On Friday, local gasoline vendors in Anna''s Retreat and Subbase said they had received their gas bills, but were still being charged the 14-cent tax.
"If the government is going to implement something like this, then we should really be seeing it in our statements. But we're not saving anything yet," one vendor said.
The tax cut comes as a result of legislation passed by the Senate on Nov. 14. The cut was first proposed in September as an amendment to the Omnibus Bill. While the bill was signed into law by Gov. Charles W. Turnbull, the tax cut amendment was line-item vetoed. Senators voted to override the veto at last Monday's full session (see: ""Senate Overrides Turnbull Veto on Minimum Wage"").
Rutnik said the problem with the law is that there is no specification for when the tax cut should go into effect.
"That's what caused the dispute. The wholesalers said they still had gas priced with the 14-cents tax, and that's what had to be sold by the gas stations," he said.
However, Rutnik added he has talked to wholesalers, and given local vendors the weekend to change the postings at the pump.
"But starting Monday, [Licensing and Consumer Affairs] will be out and about, checking to make sure the tax has been reduced," he said.
Vendors will be fined $100 a day if pump postings are not changed.
A press release issued from Rutnik's office also encouraged the Virgin Islands fuel industry to change local gas prices to reflect the recent nation-wide decline in gas prices, which amounts to at least 40 cents less per gallon. In the last month alone New York, California and Hawaii have dropped gas prices by that much, the release said, with Puerto Rico also seeing a decline of 80 cents per gallon at some gas stations.
While Licensing and Consumer Affairs has temporarily been restricted from instituting price controls on gas because of a pending District Court case, Rutnik said he wants vendors to know price gouging is illegal, and vendors who continue to hike up gas prices will be prosecuted.
When contacted Monday morning, vendors in Anna's Retreat, Subbase, and Smith Bay had not yet received gas bills, and were unable to say whether the tax cut has been implemented.
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