[Photo: FILE]
Dialogue Fiji is urging the government to review and temporarily reduce fuel duties following the latest increase in fuel prices, arguing that the state is collecting significantly more tax revenue as pump prices continue to rise.
In a statement issued today, the civil society organisation says households, businesses, farmers and transport operators are facing mounting financial pressure following recent fuel price increases.
Motor Spirit is now retailing at $3.93 per litre, while Automotive Diesel has risen to $4.58 per litre.
Dialogue Fiji Executive Director Nilesh Lal says while global events are driving fuel costs higher, taxation remains one aspect of fuel pricing that the government can directly influence.
Lal argues that because fuel attracts both fiscal duty and Value Added Tax (VAT), government revenue increases automatically when fuel prices rise.
According to figures released by Dialogue Fiji, government tax revenue on petrol has increased from approximately 74 cents per litre in February to 90 cents per litre currently. Revenue from diesel taxation has increased from about 44 cents per litre to 71 cents per litre.
The organisation estimates that government fuel-related tax revenue has increased by approximately $3.44 million since the onset of the current fuel price surge.
“This is not a situation where government is simply standing on the sidelines while citizens suffer the effects of international events.”
“The reality is that government is also benefiting fiscally from these higher fuel prices through increased VAT collections.”
Dialogue Fiji says the impact of higher diesel prices extends beyond motorists, affecting transport costs across the economy and contributing to higher prices for food, building materials and other essential goods.
The organisation also highlighted concerns within the taxi industry, noting that taxi fares have not increased since 2011 despite rising fuel and operating costs. It says taxi operators are facing growing financial pressure as petrol prices approach $4 per litre.
Dialogue Fiji further pointed to Australia’s recently announced budget support package for Fiji, suggesting that additional government revenue and external assistance should be considered when assessing measures to ease cost-of-living pressures.
The organisation acknowledges the need for the government to maintain revenue to fund essential services, but argues that temporary reductions in fuel duties could provide relief to consumers and help moderate inflationary pressures.
Dialogue Fiji is calling on the Minister for Finance and Cabinet to urgently review current fuel taxation arrangements and consider temporary reductions in fiscal duties on Motor Spirit and Automotive Diesel.
