GRENADA-Government announces raft of new measures to deal with global increase in commodity prices.

ST. GEORGE’S, Grenada, CMC – The Grenada government Wednesday announced a raft of measures aimed at reducing the impact of global increases in oil and food prices, as well as shipping costs and supply chain conditions, on citizens.

“We are certainly going to be encouraging our businessmen and women to be fair to our citizens and to be fair to the public,” Prime Minister Dickon Mitchell told a news conference after his Finance Minister Dennis Cornwall had earlier announced the measures expected to cost the state in excess of EC$18 million (One EC dollar = US$ 0.37).

He said that the government would be encouraging the Ministry of Labor with its inspectors “to work with us in making sure that we can have spot checks and audits and so on to make sure that the public is not taken advantage of and that businesses are not taking advantage of members of the public on this specific issue”.

Cornwall said that the temporary, targeted and responsible cost of living assistance program is aimed at helping households, businesses and the wider economy manage the effects of rising global food and energy prices.

“For several months now, the government of Grenada has been carefully monitoring developments in the international economy, particularly movements in global oil prices, food prices, shipping costs and supply chain conditions.”

He said the government’s approach has always been “deliberate and evidence-based” and that it has consistently assessed whether these pressures were likely to be temporary or whether they represented a more sustained external shock requiring government intervention.

“Unfortunately, recent developments in the Middle East, including the collapse of the ceasefire and the renewed escalation of military conflict, have significantly increased the likelihood that elevated fuel prices, freight costs and imported food inflation will persist for some time.”

Cornwall said that for countries like Grenada, which imports most of its fuel and a significant portion of its food, these developments inevitably place pressure on the cost of living.

“This is not inflation created in Grenada; it is imported inflation. While we cannot control international events, we can act responsibly to reduce the impact on our people,” he said, announcing that the government has approved “a temporary and carefully targeted package of relief measures that will provide immediate assistance. At the same time, we continue to investigate long-term solutions like renewable energy, food and nutrition security, agriculture production and greater economic resilience”.

Cornwall said that these measures are temporary, targeted, and affordable, adding, most importantly, that they are designed to protect people without compromising the country’s fiscal stability.

He said that the government has decided to remove the value added tax (VAT) on electricity consumption for all categories and productive sectors, helping to ease inflationary pressures more broadly.

He said there will also be the removal of the customs service charge on fuel for electricity generation.

“Government will temporarily move the customs service charge applicable to imported diesel used for generation of electricity. These measures are designed to help moderate electricity generation costs and reduce the upward pressure on electricity charges arising from higher international fuel prices.

“Although applied to imported fuel used for generation, this benefit extends to all electricity consumers because reducing fuel relief costs helps lessen the overall impact of rising fuel prices on electricity charge across the country.”

Cornwall said that the full impact of this measure will be felt gradually by consumers given the current calculations and billing cycle arrangements.

The government also announced an enhanced electricity subsidy, which it said will significantly expand the existing electricity subsidy program by increasing the monthly subsidy from EC$ 10 to EC$50 and expanding eligibility from households consuming up to 99 kilowatts per hour per month to those consuming up to 200 kilowatts per hour per month.

Cornwall said that the previous subsidy program provided support to approximately 22,089 households and that “the enhanced program will now extend meaningful assistance to approximately 38,640 households, representing a substantial increase in both the value of the benefit and the number of families receiving support.

“This measure reflects government recognition that the current cost of living measures require a stronger response. By directly reducing monthly electricity bills, the enhanced subsidy will help cushion households from high energy costs, protect disposable incomes and provide tangible relief to families affected by rising prices.”

Cornwall said that like the other measures being announced today, “this innovation is temporary, targeted and fiscally responsible, providing immediate support to households while government continues to advance long-term solutions in renewable energy, energy efficiency and economic resilience”.

The Finance Minister said that there will also be two VAT-free shopping days during August, September and October.

“This initiative is intended to provide direct and immediate savings to consumers while supporting business activity and stimulating economic growth. Under the program, approved VAT-registered and tax-compliant businesses will be permitted to sell eligible goods free of VAT during designated shopping periods.”

Cornwall said consumers will be able to purchase a wide range of everyday items, including groceries, clothing, household goods, appliances, electronics, school supplies and hardware items.

“Let me just reiterate here that this VAT-free day does not apply to luxury items like motor vehicles and other things like boats and those kinds of things,” Cornwall said, adding that the program has been designed to ensure that consumers receive the full benefit of the VAT relief to clear pricing requirements and compliance measures.

“It is expected to generate direct household savings, boost commercial activities and provide additional support to families during a period of elevated price and economic uncertainty. In essence, the VAT-free shopping days initiative allows households to stretch their budget further while providing a timely stimulus to the economy, making it a key component of the government’s broader strategy to cushion the impact of rising costs.”

Cornwall said that the Ministry of Finance will roll out a comprehensive public relations campaign on this initiative in the coming days.

He said that the government will continue the existing fuel subsidization measures, including maintaining caps on gasoline, diesel, and kerosene for domestic consumption at EC$17 per gallon, while also maintaining EC$40 for the 20-pound LPG cylinder and a cap of EC$350 for the 100-pound cylinder through December 2026.

The estimated fiscal impact of this entire package, including the enhanced electricity subsidy, VAT relief, customs service charge reduction, the VAT-free shopping days, and the continuation of the fuel cap, is expected not to exceed $18 million.

“This represents a carefully targeted investment in protecting households and supporting economic stability during a period of exceptional external uncertainty,” Cornwall added.