St. Vincent announces emergency measures to offset rising global prices

St. Vincent and the Grenadines Prime Minister Godwin Friday on Wednesday unveiled a sweeping 90-day emergency package aimed at shielding consumers and businesses from rising global fuel, electricity, freight, and commodity prices, while acknowledging that his administration inherited an economy “in shambles” six months ago.

In a 30-minute national address, Friday said the measures were designed to cushion the impact of worsening international market conditions while maintaining fiscal responsibility.

“This 90-day emergency package is a fiscally responsible shield against extraordinary global pressures,” Friday said, adding that the government’s National Cost of Living Task Force would monitor prices weekly to ensure businesses pass savings on to consumers.

“These measures must reach the people, not simply improve business profit margins,” he added.

The prime minister said his administration recognized the growing anxiety among Vincentians over the rising cost of living but insisted the country was not powerless in the face of global economic challenges.

“You will not face these challenges alone,” Friday said. “Together, we will move from pressure to progress, from uncertainty to stability, and from rescue to resilience.”

Fuel tax reductions

Central to the package are temporary reductions in taxes and charges on fuel imports to offset dramatic increases in international oil prices.

Friday said current global market conditions would have pushed gasoline prices from EC$13.22 per gallon to approximately EC$18.82 without government intervention. Diesel prices, he said, would have risen from EC$12.56 to roughly EC$17.71 per gallon.

To soften the impact, the government is immediately reducing excise taxes and cutting the customs service charge on imported petroleum products by 50 percent for three months.

“Without this intervention, a standard vehicle owner would have seen fuel costs jump higher in a single month,” Friday said.

He argued that the measures would prevent St. Vincent and the Grenadines from becoming one of the most expensive countries in the Eastern Caribbean for fuel.

Electricity relief measures

The government also announced relief measures aimed at reducing pressure on electricity bills amid rising fuel costs affecting power generation by VINLEC.

Friday said the administration would completely remove customs service charges and excise taxes on diesel used for electricity generation, representing approximately EC$1.65 million in foregone government revenue over the next three months.

In addition, VINLEC will be required to share the burden through a matching discount mechanism tied to the fuel surcharge.

Under the arrangement, when the fuel surcharge exceeds EC$0.71 per kilowatt hour, the utility company will contribute a 50 percent matching discount. If the surcharge rises above EC$0.77 per kilowatt hour, VINLEC will provide a full matching contribution.

“For households, this intervention means relief on utility bills and protection against runaway increases,” Friday said.

He added that the measures would also help protect small businesses such as restaurants, shops, bakeries, and manufacturers from escalating operating costs.

Cooking gas and import costs

The government also announced a full removal of customs service charges on liquefied petroleum gas (LPG), commonly used for cooking.

Friday said international LPG prices have increased by 27 percent since January, and without intervention, families would face significantly higher costs for cooking gas cylinders.

By removing the tax entirely, the government expects to absorb more than EC$500,000 in lost revenue during the 90-day period.

“We will protect the dinner table of Vincentian families,” Friday said.

The administration is also moving to reduce inflation linked to global shipping costs.

Friday said freight charges for imported goods have surged sharply this year, with the cost of shipping a standard 20-foot container from the United States to Kingstown rising from as low as EC$2,200 earlier this year to as much as EC$4,800.

To address the issue, the government will remove shipping surcharges from customs tax calculations and benchmark freight rates used for taxation purposes to January 2026 levels.

“Even if a shipping company charges EC$4,800 for a container, the government will calculate the taxes as if the freight rates were still at January levels,” he explained.

Officials say the move is intended to reduce the landing costs of imported goods and slow the pass-through of international inflation to consumers.

Agriculture and renewable energy

Friday also announced additional measures aimed at strengthening long-term economic resilience, including subsidized seeds and a 30 percent discount on fertilizer for local farmers to boost domestic food production and reduce dependence on imports.

The government is also considering a VAT waiver on cement if construction costs continue rising sharply.

In the energy sector, the administration plans to maintain its full tax waiver on solar photovoltaic systems while accelerating efforts to transition toward renewable energy.

“We want to use this new oil crisis as an opportunity forced upon us to move aggressively towards renewable energy production, especially solar,” Friday said.

He added that discussions were continuing with regional partners through Caribbean Community (CARICOM) to secure more stable government-to-government energy arrangements.