Finance Minister Dr Ashni Singh on Wednesday evening announced that Government would be further reducing the excise tax on gasoline and diesel to ease the domestic impact of the continuous rise in the world market price for fuel.
Back in February of this year, the Government had reduced the excise tax rate on both gasoline and diesel from 50 percent to 35 percent. Since that time, oil prices have continued to rise steadily on the world market, moving from over US$60 a barrel to over US$80 a barrel at close of trade on October 5, 2021. This steady rise in the world price has had a resultant effect, with prices rising on the domestic market also.
Minister Singh announced that Government would be lowering the excise tax rate on both gasoline and diesel from 35 percent to 20 percent with immediate effect. This reduction would aid in cushioning the impact on domestic consumers, particularly the travelling public, as well as those productive sectors for whom fuel is an important input.
Finance Minister, Dr Ashni Singh
“The prices at the pump are expected to also be reduced with immediate effect, with gasoline prices expected to reduce from $213 per litre to $198 per litre, and diesel prices from $200 per litre to $185 per litre,” the Ministry of Finance explained in its statement.
Minister Singh explained that the adjustment in the excise tax rate on fuel from time to time is part of the measures that the PPP/C Government would implement to cushion the domestic impact of world market price fluctuation. He emphasised that implementation of these measures is in keeping with President Irfaan Ali’s commitment to ensuring that Guyanese consumers continue to be protected from escalation in fuel prices on the world market as far as possible.
Back in July of this year, the Finance Minister, in responding to questions from this publication, had noted that Government is monitoring the price of fuel and is considering options, including whether to further reduce taxes. Dr Singh had pointed out that soon after the People’s Progressive Party (PPP) took Government last year, it reduced taxes on fuel.
“It is a fact that oil prices have been rising globally; we are monitoring it closely. The reality is that oil prices are a function of the international markets, and so the cost of landing fuel in Guyana has increased,” he had said.
“As you know, a few months ago, we took the important step of reducing the taxes on fuel prices significantly. So, we’ve already implemented one very sharp reduction on the excise taxes that are charged on gasoline and diesel. So that has already been implemented,” Minister Singh had added.
While they continued to monitor the situation, however, the Minister had explained at the time that the underlying reason for the fuel increase is the increase in the cost insurance and freight (CIF) of the fuel. (G3)
