Why St. Maarten cannot so easily do what some Caribbean neighbors are doing on oil prices

Across the Caribbean, governments are again being forced to respond to a problem they did not create but cannot ignore: rising oil prices driven by conflict, disrupted shipping routes, and renewed instability in the global energy market. Reuters reported that the war involving Iran pushed analysts to sharply raise their 2026 oil forecasts, with the Strait of Hormuz, which carries about 20 percent of global oil and LNG transport, becoming central to fears of prolonged supply disruption.

For small island economies, that kind of shock never stops at the pump. It moves quickly into electricity, freight, food distribution, public transportation, and the wider cost of living. In St. Maarten’s case, the latest government fuel announcement makes that plain. Effective April 3, 2026, the maximum consumer price for ULG gasoline rose from CG 2.850 to CG 3.055 per liter, while diesel rose from CG 2.679 to CG 2.716 per liter. The announcement states that SOL needed to restock fuel and had to purchase ULG and diesel at higher prices because of international developments, which then required a local price adjustment.

That is why comparisons with neighboring islands are politically powerful, but not always economically complete. Citizens understandably look around the region and ask why other governments appear to be cushioning the blow while St. Maarten seems more limited in its response. Anguilla is one of the clearest examples. According to official Anguilla budget documents, the island had already removed GST from gasoline, diesel, and LPG on a continuing basis, and had maintained fuel-related tax relief as part of broader cost-of-living measures.

But Anguilla’s latest steps go even further, and that is where the comparison becomes more revealing. Premier Cora Richardson Hodge announced on March 30 that the Executive Council approved the suspension of import duty and the customs service fee on gasoline and diesel imports for an initial three months, while goods tax and excise would remain at zero. At the same time, the government capped the fuel surcharge on electricity for an initial two months at EC$0.42 per kilowatt hour for households and most other customers, and EC$0.65 per kilowatt hour for the accommodation sector. Anguilla also said the cost of these measures, estimated at EC$6.4 million over April and May, would be absorbed through existing budgetary resources. That is meaningful intervention, but it is also the clearest illustration of the point St. Maarten now faces: relief costs real money.

And that is where St. Maarten’s financial reality becomes harder than the public comparison sometimes allows. St. Maarten does not simply leave fuel prices entirely to the market. It regulates maximum prices and publishes the build-up that produces the final consumer rate. The latest St. Maarten announcement shows that gasoline now includes a Petrotin posted price of CG 1.893 per liter, freight of CG 0.141, import duty of CG 0.290, a liquid throughput fee of CG 0.080, a wholesaler margin of CG 0.230, turnover tax of CG 0.132 at the wholesale stage, a retailer margin of CG 0.145, and turnover tax of CG 0.145 at the consumer stage, arriving at a maximum consumer price of CG 3.055. Diesel reflects the same posted price and freight, with a throughput fee of CG 0.080, wholesaler margin of CG 0.117, turnover tax of CG 0.117 at the wholesale stage, retailer margin of CG 0.126, and turnover tax of CG 0.129 at the consumer stage, arriving at CG 2.716.

That means the policy tools available to St. Maarten are not mysterious. Government could reduce or suspend part of the tax burden, waive or trim import-related charges, or absorb some of the increase through direct support. But every one of those choices has a fiscal cost. Reducing import duty means less revenue. Suspending turnover tax means less revenue. Capping electricity-related pass-throughs means government or the public utility system must absorb the difference somewhere. In other words, the issue is not whether St. Maarten has levers. It does. The issue is whether it has enough room in the budget to pull them without creating another financial problem.

Recent official warnings suggest that room is limited. In its November 2025 advice on St. Maarten’s draft budget amendment, the Cft said free liquidity by the end of 2025 was estimated at only CG 10 million, where earlier projections had placed it at CG 23 million, and that future years were expected to show continuous negative end balances. The same advice notes that the IMF’s benchmark for St. Maarten would be a liquidity buffer of roughly one month of expenses, about CG 50 million. The Cft also warned of other potential liquidity risks, including arrears to SZV and possible pressure related to GEBE. That is not the profile of a government with broad fiscal room to surrender revenue or absorb new subsidies casually.

This is the part that can easily get lost in public frustration. Citizens do not experience liquidity ratios or fiscal buffers, they experience the price increase when they fill up, pay their current bill, or buy groceries. So the comparison with Anguilla lands politically because it feels immediate and visible. But from a budget standpoint, a government already operating with weak cash cushions cannot simply copy another island’s relief package unless it knows where the replacement money will come from. Anguilla was able to say it would absorb the cost through existing budgetary resources. St. Maarten has not demonstrated that it has comparable space, and recent Cft warnings point in the opposite direction.

There is also a structural difference in how the two cases work. Anguilla’s response is built around suspending import duty and customs service fee, while keeping other fuel taxes at zero, and pairing that with a cap on electricity fuel surcharge. St. Maarten’s pricing system is already a controlled build-up model, meaning each charge and tax component is visible in the final consumer price. That transparency is useful, but it also means any relief would appear directly as foregone revenue or absorbed cost. In a country under fiscal oversight and with limited liquidity, that makes intervention harder, not easier. It becomes a direct budget decision, not just a political announcement.

The wider economy makes the problem even more sensitive. The CBCS projected in its June 2025 Economic Bulletin that St. Maarten’s real GDP growth would moderate to 2.2 percent in 2026, with inflation still present and oil price shocks carrying consequences for both growth and prices. In its December 2025 bulletin, the CBCS said growth in St. Maarten was expected to ease to 2.4 percent in 2026 and average about 2.0 percent over the medium term. Taken together, those forecasts point to an economy that is not collapsing, but is also not expanding with the kind of strength that gives a government easy room for broad relief packages.

That matters because St. Maarten is highly exposed to imported inflation. Fuel affects aviation, cargo, delivery costs, electricity generation, public transportation, and the day-to-day movement of goods and people. Higher oil prices do not remain isolated within the energy sector. They move through the economy. Reuters and other reports on the current conflict have also noted broader upward pressure on freight and food prices tied to rising energy costs and supply uncertainty. For an island economy that imports heavily and depends on tourism, that creates a double vulnerability: higher costs at home, and possible pressure on travel demand abroad.

So the comparison with Anguilla is useful, but only if it is interpreted honestly. It should not be treated as proof that St. Maarten simply does not care or does not want to act. It is better understood as a case study in what a government can do when it believes it has enough room to absorb the cost. Anguilla’s measures are concrete and visible, but they are also backed by a decision to take a direct fiscal hit. That is exactly what makes St. Maarten’s situation more difficult. If the country is already being warned about low liquidity, future negative balances, arrears, and utility-related risks, then copying another island line for line may be politically attractive but financially dangerous.

That does not mean St. Maarten should do nothing. It means the country may have to think more narrowly and more strategically. A broad waiver of fuel-related charges may be hard to afford. But more targeted relief could be more realistic: temporary help for public transport operators, relief linked to electricity costs for vulnerable households, support tied to essential goods distribution, or temporary measures focused on sectors where the shock hits hardest. Those are not as dramatic as a sweeping announcement, but they may be more consistent with St. Maarten’s actual financial limits.

Government also has a communications problem. When neighboring islands announce import-duty suspensions, electricity caps, and visible tax relief, the public sees action. When St. Maarten moves more cautiously, or explains little, the public sees inaction. That gap is politically costly. Even if the fiscal caution is justified, the government still has to explain clearly why St. Maarten cannot so easily do what others are doing, what options are realistically on the table, and under what conditions intervention would happen. Without that explanation, comparison quickly becomes condemnation.

The uncomfortable truth is that oil shocks do not hit all Caribbean countries in the same way, and not all governments have the same capacity to respond. Some can absorb lost revenue for a few months and shield households more visibly. Others are already managing tight liquidity, uncertain revenue growth, and broader structural pressures. St. Maarten’s challenge is not only whether it wants to cushion the blow, but whether it can do so without opening another hole in an already fragile fiscal position. That is the distinction the public needs to understand.

But the public is also entitled to expect that limited room does not become an excuse for paralysis. St. Maarten may not be able to do everything Anguilla is doing. Still, it has to show that it is studying the numbers, weighing targeted options, and preparing to soften the blow where it can. In a moment like this, that may be the difference between a government that looks passive and one that is working within hard financial realities.

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