…company making “windfall” on back of consumers – PAC Chairman
… Guyanese should “get accustomed” to fluctuating prices – Gaskin
By Shemuel Fanfair
Vehicle operators countrywide will now have to pay more at the pumps following the revelation that fuel prices have been increased.
Dominic Gaskin
The Guyana Oil Company (GuyOil) on New Year’s Day announced the “upward movement” in prices for its products nationwide, citing rising prices on the world market. The new price structure took effect January 2 and it was disclosed that the gasoline price jumped by $12.00 to $190.00 per litre while kerosene and gasoil prices increased by $5.00 per litre, respectively.
“These increases are directly related to increase in acquisition cost from source and are consistent with trends in the upward movement of world market price for petroleum products,” a statement from the oil company on Sunday noted. 
The company stated that it had reduced gasoline prices back in October 2016, which it noted was consistent with its policy of “passing on favourable prices to the Guyanese populace” whenever possible.
As Guyana’s electricity grid is heavily dependent on fuel acquisition, it is likely that the Guyana Power and Light (GPL) may soon increase its rates to offset the hikes. In an invited comment, Business Minister Dominic Gaskin on Monday noted that Guyanese should “get accustomed” to changing prices as there was fluctuation on the world market.
“It’s a fairly small increase. You have to understand too that GuyOil did reduce the prices not too long ago as fuel on the world market declined. Now raising it again in the face of rising prices so we, like anybody else in the world, have to get accustomed to fluctuating oil prices on the international market and their impact on prices at the pump. It is not unusual; as in many places in the world, prices are adjusted on a daily basis,” the Business Minister said.
The increase in fuel prices comes against the backdrop of Government’s announcement during the National Budget 2017 that the Value Added Tax (VAT) would be included on electricity bills above $10,000 from this month. Responding to concerns that these compounding factors would impact adversely on the local populace, Gaskin rejected this assertion, noting that the addition of VAT would only affect the minority of consumers.
“I don’t see the connection because GPL hasn’t indicated that they were planning to raise their traffics. As far as the VAT of the electricity is concerned, only about 25 per cent of the consumers are consuming in excess of $10,000 per month threshold,” Gaskin indicated.
Meanwhile, responding to the many suggestions that 2017 would be a dismal year for business and the economy as a whole, the Business Minister noted: “Those [suggestions] are nonsense, I think there are people who are hoping for some sort of recession, but there is no basis for those suggestions. The forecast for growth between three to four per cent, so there is nothing dismal about that.”
He further highlighted that many business opportunities exist for persons to capitalise on, once they were “prepared to go the extra mile and do the ground work”.
However, Chairman of the Public Accounts Committee (PAC) in the National Assembly, Opposition Member of Parliament, Irfaan Ali’s assessment of the rising costs was in steep contrast to that of the Business Minister. He told Guyana Times on Monday that as there was only a US$2 increase in world oil prices, Government could have adjusted the tax rate to cushion the effect of the increase.
“First of all, this Government has shown very little remorse for the Guyanese people. Their immediate response to issues like these is to pass the cost on the consumer. When we were Government, we avoided the impact of these increases by adjusting the tax rate to the benefit of the consumers. They cannot attribute this to movement in the prices on the international market. The price has only moved US$2 over the November pegged price of $52,” Ali explained.
According to his calculations, the oil company would benefit from the new increases.
“When you calculate the increase GuyOil will be charging it is equivalent to between 10 and 12 US dollars per barrel. This is designed to make a windfall on the backs of the consumers,” Ali opined.
The former Housing and Tourism Minister further reiterated the convention that business people would pass on increases and new charges to the general populace. “The impact of this increase on the productive sector will further affect their margins and cost of production. In the end, who will suffer? The consumer, the ordinary man, all these new taxes and charges will ultimately be borne directly by the consumers,” Ali indicated.
