My advice is not to remove the fuel tax now as the government will lose about $150 million which can be used to provide urgent relief to the most vulnerable in the country after the fuel price increase.
That is the message by National Federation Party Leader, economist and former Finance Minister, Professor Biman Prasad who says that there should be urgent contingency plans that need to be communicated to the people.
Professor Prasad says even if the government reduces VAT to zero on fuel, and remove all the taxes, including the fuel tax of 20 cents per litre on diesel and 46 cents per litre on unleaded, the fuel price will still rise, because externally, the prices will go up.
He adds the government must urgently ensure that public transport is also not affected and look at subsidies for the public transport sector.
Professor Prasad says social welfare relief needs to be assessed, government expenditure priorities need to be reassessed urgently based on the situation now, and a clear focus is needed for business continuity and support.
He says all steps should also be taken to ensure there are no job losses.
Professor Prasad adds the Opposition should not play politics with this national crisis.
He says this is a crisis that is not created by the Fijian government or some business entities or individuals.
He says it is a crisis that is externally driven.
Professor Prasad says even if the war ends tomorrow, there are a number of things that will happen to get the production, and the supply back on track, it is going to take a long time - it will take six months, even a year, depending on what's happening.
The economist also stresses that we need to ensure our energy supply is protected, and 50 percent of our energy is from diesel and 50 percent is from hydro.
He says we have to also make sure that the fuel companies have the right price incentive, because it's not so much the price itself, it's a supply issue.
Professor Prasad says having no fuel will cause a lot of issues, and all the necessary steps have to be taken with a great sense of urgency.
We have sought comments from the Prime Minister and Minister for Finance.
