Dialogue Fiji calls for temporary fuel duty reduction

Fiji's civil society organization Dialogue Fiji is calling on the government to temporarily reduce fuel duties amid escalating pump prices. The group argues that the state is collecting significantly more tax revenue as fuel costs climb, placing mounting financial pressure on households, businesses, farmers, and transport operators.

Dialogue Fiji Executive Director Nilesh Lal stated that while global events drive fuel costs, taxation is an area the government can directly influence. He explained that because fuel attracts both fiscal duty and Value Added Tax (VAT), government revenue increases automatically with price hikes. Figures released by Dialogue Fiji show government tax revenue per liter of petrol has risen from approximately 74 cents in February to 90 cents currently. For diesel, revenue has increased from about 44 cents to 71 cents per liter.

The organization estimates that government fuel-related tax revenue has increased by about $3.44 million since the current price surge began. "The reality is that government is also benefiting fiscally from these higher fuel prices through increased VAT collections," Lal said. He added that the impact of higher diesel prices extends beyond motorists, affecting transport costs for food, building materials, and other essential goods.

Dialogue Fiji also highlighted the taxi industry's plight, noting that fares have not increased since 2011 despite rising operational costs. They pointed to Australia's recent budget support package for Fiji, suggesting that additional government revenue and external aid should be considered when assessing measures to alleviate cost-of-living pressures. While acknowledging the need for government revenue, the organization believes temporary duty reductions could offer consumer relief and help control inflation.

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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.