Government, in defending itself against criticism of inaction regarding the rising gas prices, has indicated that providing subventions to cushion international hikes is an option on the table.
Prices at the pumps have caused a chain reaction, with minibus operators mounting protests
At Friday’s post-Cabinet briefing, Public Infrastructure Minister David Patterson affirmed that Government has been engaging minibus operators. According to Patterson, the minibus association has been asked to document their grievances.
Patterson noted that pending the receipt of this feedback, no official policy decision has been made. But when pressed on exactly what the Government is doing to address the matter, Patterson noted that subventions are being considered.
“That is all part of the whole menu of measures which we’re considering, if gas prices will be moved. We want to look at it holistically and that is what we’re doing at the moment, engaging (the operators),” Patterson related.
Gas station prices for fuel had increased rapidly from $215 per litre to prices ranging from $230 to $250 per litre. Since the hike, there have been widespread protests and fears of public transportation strikes.
There have been cases of minibus operators burning tires along the East Coast railway embankment. The Federation of Independent Trade Unions of Guyana (FITUG) has been among those calling for Government to act swiftly to protect consumers.
Tax measures
The parliamentary Opposition has actually outlined ways in which the Government can make a meaningful intervention into the issue. At a press conference, Opposition Leader Bharrat Jagdeo had claimed there is fiscal space to make the adjustment with the tax regime to allow a reduction of gas prices for local consumers.
Jagdeo had related 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 had said that, “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 had 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 onto 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 had told the media that with the crude prices at about US$75 a barrel and not US$120, there was definitely room to make significant adjustments to the price of fuel at the pump.
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 precedence for other companies to follow.
However, the fact that prices were high even at Guyoil stations meant private companies did not have to lower their prices in order to maintain their competitiveness.
