ICCC alarmed over carbon levies

THE Independent Consumer and Competition Commission (ICCC) says it is concerned about the introduction of new carbon levies or additional excise duties by the Climate Change and Development Authority (CCDA).
Its concerns were due to the lack of consultation on the matter with the affected industries, the legal process used to introduce these new levies and its adverse impact on consumers and businesses in PNG, given the rising cost of fuel in the country.
The new levies were initially gazetted by the Ministry of Finance in National Gazette No.G304 last May 27 and then amended in National Gazette No.G673 last Oct 12, and reflected as an increase in excise tariffs.
ICCC Commissioner and chief executive officer Paulus Ain said following the gazettal of these new levies, the ICCC made a decision not to include the additional excise duties in the pump prices for petrol, diesel and kerosene based on the view that any amendment to the Excise Tariff Act needed to be initiated by the Department of Treasury and passed through Parliament. Ain said the Department of Treasury was advised last October that carbon levies or additional excise should not be implemented until the impact on businesses and consumers were fully assessed.
“Despite the advice from Treasury, who are responsible for tax policy matters, the CCDA has proceeded to implement the carbon levies or additional excise tariffs, as per G673, last April 12,” he said.
“Despite the important role the ICCC undertakes in pricing of the refined petroleum products at the retail level, the ICCC found out about this latest development when it was brought to their attention by a concerned stakeholder.
“Treasury and ICCC were not copied on recent correspondences in relation to this matter when CCDA informed the industry of their intention to commence collecting these new levies or additional excise duties this week.”
Ain said the ICCC was concerned about the impact of these carbon levies and fees on the petroleum, airline and agriculture industries, and consumers at a time when the economy and businesses were already reeling from the effects of the Covid-19.
“Based on the volume of fuel products used in the country in 2020, the ICCC has estimated that from 2021 onwards, consumers and businesses in PNG will incur an additional fuel cost of about K12 million annually,” he said.
“This additional estimated cost to the economy will increase once the economy recovers and more fuel is consumed in the market, or when CCDA further increases the carbon levies in the future.”