By Makeida Antonio
Antigua and Barbuda will undoubtedly be affected by an increase in prices for food and petroleum products if the escalating conflict between Russia and Ukraine continues.
Almost immediately following the news of the Russian military invasion of Ukraine on Thursday, the world began experiencing higher gas prices.
The price of oil has surged past $100 for the first time since 2014 when Russian President Vladimir Putin launched a military attack on his European neighbour, Ukraine, which led to widespread condemnation of the blatant disregard for international law.
Due to these developments, Prime Minister Gaston Browne has notified residents about the potential increase of local gas prices in the event that the war in Eastern Europe shows no signs of de-escalation.
“Now, I believe that within the last few days petroleum prices are about $100 per barrel and potentially it could get up to maybe $120 within the next week or two, especially if this conflict continues. So, here is the implication of potentially where we have been subsidising the pricing and would have kept the pricing of petroleum products stable for the last few years, we could have a situation where we are forced to increase the price at the pump,” Browne explained on local radio over the weekend.
Further explaining the economic fallout which could arise out of the emerging conflict, the Prime Minister noted that the government may no longer be able to shield consumers from high prices at gas station pumps across the country.
“If petroleum prices continue to increase, then there may be a time when we cannot continue to hold the price of $12.50 or whatever it is for gas and then in that case, they may have to be a pass through at some point. Again, the whole idea is to reduce the price at the pump but if it gets to the stage in which the government consumption tax is totally wiped out and then it’s going into negative ground then we may have to pass on the increase in price to consumers,” he said.
Additionally, the price of utilities, such as electricity could also rise as a result of the price of oil skyrocketing because of the closed borders and sanctions because of the war.
“Petrol and food, those contribute to co-inflation and the thing about it is that these increases in those prices affect the poor disproportionately and that is why Antigua and Barbuda has had this price equalisation mechanism in place to control the price at the pump.”
With regards to international relations, Browne believes that larger countries tend to throw democracy out of the window due to sheer power and size of both land mass and economy.
“We have to be careful not to get involved in their rhetoric but at the same time stand on those principles that will defend our interests. These powerful countries, whenever it is convenient for them, they speak about defending democracy but whenever they believe their so-called national interest is at stake, then might becomes right and that is precisely what is happening right now in Russia,” he said.