BARBADIAN MOTORISTS will see some relief at the pump from next month, after Government yesterday announced a series of measures designed to keep fuel prices from climbing sharply as the country faces rising global oil costs exacerbated by the ongoing war in the Middle East.
The announcement by Minister of Finance Ryan Straughn yesterday during the 2026 Budgetary Proposals and Financial Statement means a total reduction of 15 cents per litre on gasoline and diesel, driven by a temporary cut in excise taxes, continued caps on value added tax (VAT) collected at the pump, and a lower recovery charge by the Barbados National Energy Company Limited.
Under the new measures, from April 1, the VAT collected on gasoline will remain capped at 47 cents per litre, while the VAT on diesel will stay capped at 37 cents per litre. Those caps will run from April 1, 2026, to March 31, 2027, as part of Government’s effort to shield consumers from volatile international oil prices.
Excise tax reduced
In addition, the excise tax on gasoline will be reduced for three months from 99.39 cents to 89.39 cents per litre, while diesel excise will fall from 44.03 cents to 34.03 cents per litre over the same period.
The VAT caps will remain in place until March 31, 2027, or earlier if international fuel prices stabilise, while the temporary reduction in excise taxes will be reviewed after three months.
Further relief will come from the Barbados National Energy Company Limited, which has agreed to reduce the rate at which it is recovering its 2022 losses. That recovery charge will drop from nine cents per litre to four cents per litre, although the move will extend the period required for the company to fully recover those losses beyond the originally projected time line.
Government also indicated that the interventions are designed to prevent local fuel prices from breaching a key psychological threshold. Current projections show that gasoline prices in Barbados would not exceed $4 per litre unless global oil prices rise above US$110 per barrel. (BA)