Govt refuses to use fiscal space to lower fuel prices

…more concerned with increasing revenues – Jagdeo

Despite the Government’s reluctance to speak on or engage parties in helping to address the issue of high fuel prices, Opposition Leader Bharrat Jagdeo claimed that there is fiscal space to make the adjustment with the tax regime to allow a reduction of gas prices for local consumers.

Jagdeo told a news conference on Thursday that under the People’s Progressive Party/Civic (PPP/C) Government, there was a system used in cases like these, where the taxes can be adjusted based on the movement up or down on the gas price, so that the benefits would be passed onto the people.
Given the mounting criticisms and the need for serious attention to be paid to the issue, the PPP/C General Secretary said, “The Government through public pressure must adjust the rate at the pump. They have a lot of room. They have the fiscal space as well as the tax play to make that adjustment.”
The former Guyanese Head of State recalled that when the prices for crude oil stood at about US$75 per barrel, lower that the US$120 high before the rapid tumble a few years ago to about US$28.
“We had argued that with the rapid tumble, the benefits should have been passed on to the Guyanese public, who would have seen lower prices at the pump and in their electricity bill. They never did that. And what happened was that they raked in billions in revenue; they collected over $25 billion at GPL alone.”
He told the media that now the crude prices have gone up back to about US$75 a barrel and not US$120 as yet, there is definitely room to make significant adjustments to the price of fuel at the pump.
But Jagdeo said he is convinced that the Government may not be too keen on implementing that, especially based on the fact that they are more concerned about collecting more revenue. “Not to give people a chance because price for fuel has an impact on production as well as cost of living. They don’t see this as a responsibility but one to collect taxes. They just want to collect more taxes,” he asserted.
Another point raised by Jagdeo was the fact that under the PPP/C Government, the Guyana Oil Company (Guyoil) was used as a regulatory agency whereby the price at the State-owned entity set a precedence for other companies to follow. “Now they are keeping the price high at Guyoil, so the private companies are raking in large sums of money because they don’t have to make adjustments,” he claimed.
In recognising the protest actions being taken by minibus operators in relation to the increased fuel costs, Jagdeo said Government’s response to this issue just highlights how incompetent they are at resolving very simple issue, especially those that have a direct impact on people lives and the economy.
“What we are seeing with the manifestation of protests is because of the incompetence of Government and their desire to rake in as much as they can… and then waste it, not to see how they will temper cost of living,” he said, explaining that minibus operators are also faced with a ban on used tyres.
He said “If they (minibus operators) don’t adjust their prices, then the transport cost may go up because since 2015 they minibus operators been saying to me that they have to buy new tyres and their costs have gone up and now have to pay taxes on other stuff. So they are faced with another situation,” he added.
While persons have shared their displeasure with the increased prices, many public transport drivers have expressed that it will affect them if it continues to escalate. Several minibus drivers have said the increase in fuel will ultimately lead to the increase in transportation costs.
There have been widespread protests some small and other large, at various parts of the country, particularly for minibus operators plying the East Coast or East Bank Demerara routes.
In September 2017, world market prices for fuel increased due to the hurricane, which resulted in Guyoil adjusting the prices in gasoline, diesel and kerosene to a higher cost. Again, in February of this year, Guyoil adjusted its prices upwards. The average price of gasoline around the world is US$1.15 per liter.
A check at the pumps on Thursday revealed that Guyoil is selling fuel at $230 per liter while privately operated Shell was selling at $239 per liter and Rubis was selling at $235 per liter.