Reduction of fuel prices leaves more money in people’s pockets – Finance Minister
Slashing of excise tax
The decision by Government to reduce the excise tax on fuel will leave more money in the pockets of Guyanese.
These sentiments were expressed by Finance Minister Ashni Singh on Thursday, as he explained that it was for this very reason that the decision was made to slash the tax.
On Wednesday evening, Government announced that it had reduced excise tax on fuel from 50 per cent to 35 per cent. According to Dr Singh, this reduction will have an impact at both the micro and macro levels.
“The relief on the fuel prices will enable consumers, they no longer have to pay that much for fuel so they have a few extra dollars they can do something else with. For businesses, they no longer have to pay that much for fuel so they have a few extra dollars they can invest in something else or do whatever it is they will do with their additional cash flow to generate more economic activity,” Dr Singh is quoted by the Department of Public Information (DPI) as saying.
Dr Singh noted that the People’s Progressive Party/Civic (PPP/C) Administration has always paid keen attention to what happens on the world market. He said the price for fuel on the world market increased from US$35 in October to over US$60 as of Wednesday. Minister Singh said monitoring the world market price for fuel led to Government’s timely intervention, which relieves the financial burden on citizens.
“We are firmly committed to ensure that any possible shocks to cost of living are contained to make sure that consumers do not feel too sharp an impact as a result of world market price developments. So that is the backdrop to which the intervention was made. So, basically, we implemented a cut on the excise tax rate, which then feeds into the price of the pump, so the price of the pump is reduced as well,” the Finance Minister stated.
As a result of the reduction in the excise tax rate, the prices at the pump would also be reduced with immediate effect. Specifically, gasoline prices are expected to be reduced from $184 per litre to $170 per litre and diesel prices from $170 per litre to $160 per litre.
The Minister explained that during the PPP/C’s previous term in office, it had put in place arrangements to adjust the excise tax rate on fuel from time to time to cushion the domestic impact of world market price fluctuations and the current tax adjustment was being effected using this previously-established mechanism.
Minister Singh emphasised that the adjustment was in keeping with the strong ongoing commitment by President Irfaan Ali’s Government to ensure that domestic customers are protected from sharp price escalations on the world market and cost-of-living increases.
On Friday last, the Government presented the $383.1 billion 2021 budget, themed “A Path to Recovery, Economic Dynamism and Resilience”, without the introduction of any new taxes.