The announcement by Tropical Shipping of an increase in bunker surcharges (see Monday newspaper) affecting cargo from North America per April 12, though hardly welcome, was not unexpected. Due primarily to the war in the Middle East and Iran’s closure of the Straight of Hormuz to tanker traffic as well as the bombing of refineries and related facilities in the region, skyrocketing oil prices are having a global ripple effect on the cost-of-living.
The hikes in container and vehicle transport fees will be substantial, of 250% or more. King Ocean Services is applying similar tariffs for all freight between the US and so-called ABC islands (Aruba, Bonaire and Curaçao) effective the same date.
This matter will thankfully be reviewed on April 2 and 9 prior to implementation. There is thus a chance the decision could still be reversed or adjusted, but that would probably take reopening the strategic waterway and/or ending the war soon.
Much has been said this past week about what St. Maarten can do to mitigate the impact, including tax exemptions, subsidies and a higher minimum wage. However, Minister of Economic Development MEO Grisha Heyliger-Marten warned that any such actions must be carefully evaluated to ensure they remain sustainable and beneficial to the people.
What is being looked at are a possible change to excise taxes and price controls. As known, there is a so-called “basket” of goods for which government sets maximum rates.
Expanding the content of such is also tricky, since this was already done six-fold, from 12 to 72 items, on August 1, 2022. One must keep in mind too that businesses cannot be forced to sell products at a loss, so if related expenses go up, so must ultimately the price if they are to keep carrying the product in question.
For now, persons can consider adjusting their spending habits, for which the minister offered some tips like driving less, choosing alternatives at the grocery store or paying more attention to savings opportunities. In other words, shop smart and tighten your proverbial belt.
