Fuel Costs Soared Over 100%; More Relief Carries Fiscal Risks

Calls for deeper fuel-tax reductions continue mounting as global oil prices surge; however, an analysis of Belize’s fuel-pricing structure suggests that substantially lower pump prices would likely come at the cost of tens of millions in government revenues, increased pressure on foreign reserves, and risks to the country’s fiscal position.

An analysis by The Reporter of official pump-price structures published by the Government of Belize, alongside fuel-volume estimates contained in the Maritime Sector Baseline Assessment Report for the Belize Port Authority (April 2025) suggests that the Government’s previously stated fuel-tax revenue losses are broadly plausible when measured against current global oil-price pressures.

The analysis focuses exclusively on Regular gasoline and Diesel, the two largest-volume fuel categories for which annual gallon estimates are available in the April 2025 report. Premium gasoline and kerosene were excluded because premium fuel does not benefit from the same tax-reduction structure and the report does not provide a separate kerosene volume estimate.

According to the Belize Port Authority report, Belize imports an estimated annual average of approximately 16.8 million gallons of Regular gasoline and 21.6 million gallons of Diesel.

Government pump-price schedules show that, as of January 8, 2026, Government taxes on Regular gasoline stood at $4.7992 per gallon. By May 20, 2026, that figure had fallen to $3.8074 per gallon — a reduction of roughly $0.99 per gallon.

Applied against the estimated annual import volume, that decline would translate into an estimated annualized revenue shortfall of approximately $16.6 million if current trends persist throughout the year.

For Diesel, Government taxes declined from $4.3926 per gallon in January to $3.2342 by May 20, a reduction of approximately $1.16 per gallon. Based on estimated annual import volumes, this would imply a potential annualized shortfall of roughly $25 million.

Combined, the implied reduction in tax intake from those two fuel categories alone approaches approximately $42 million annually under the current tax structure.

However, the analysis also suggests that current tax reductions have only partially insulated consumers from the rapid escalation in international fuel prices.

Government data shows that the landed cost for Regular gasoline rose from $4.6240 per gallon in January to $9.3875 by May 20 — an increase of more than 100 percent within five months. Diesel similarly rose from $5.4354 to $10.1072 during the same period.

Despite those increases, taxes on Regular gasoline declined by only about 20 percent. This means the majority of the increase in global fuel costs was still passed through directly to consumers.

Fuel analysts commonly describe this as “cost pass-through,” referring to the extent to which international fuel-price increases are absorbed by consumers rather than offset through subsidies or tax reductions.

Based on the analysis, roughly 80 percent of the increase in landed costs for Regular gasoline was ultimately passed through to consumers at the pump.

To reduce that pass-through effect to approximately 50 percent, Government taxes on Regular gasoline would have needed to fall to roughly $2.40 per gallon instead of the current $3.81.

Under that scenario, estimated annual Government revenue from Regular gasoline would fall from approximately $80.6 million under January’s structure to roughly $40.3 million annually — implying a shortfall of about $40 million from that category alone.

Applying a similar approach to Diesel would generate additional annualized revenue losses approaching approximately $48 million.

Combined, the estimated impact from both categories could approach roughly $88 million annually under a more aggressive fuel-price cushioning strategy.

The analysis further suggests that the implications extend beyond domestic tax revenues.

Because Belize imports fuel, rising landed costs also increase demand for foreign exchange, particularly U.S. dollars, to finance those imports. If fuel prices are heavily subsidized or taxes are substantially reduced to maintain lower domestic prices, fuel demand could remain relatively elevated despite rising global prices.

That dynamic could sustain strong demand for imported fuel even as acquisition costs increase sharply, potentially placing additional pressure on Belize’s balance of payments and foreign-reserve position.

The findings also raise broader questions regarding the sustainability of Government’s primary surplus position, which depends on maintaining strong revenues relative to expenditures.

While lower fuel taxes may provide short-term relief to consumers and businesses, the analysis suggests that fully shielding the domestic market from global oil-price shocks could carry significant fiscal and macroeconomic consequences.