Finance Minister Dr Ashni Singh announced on Thursday that government is implementing a drastic cut in the excise tax charged on gasoline, with the aim of cushioning the impact on domestic consumers of significant upward price movement observed on the world market for oil.
On Thursday afternoon, Minister Singh indicated that the necessary instructions have been issued to reduce the excise tax on gasoline by one-third, from 30 per cent to 20 per cent. This change will take effect from Friday, March 18th. This latest announcement comes on the heels of a move made by the minister just last month to reduce the tax on diesel from 20 to 15 per cent.
The minister indicated that while crude oil was trading at prices in excess of US$100 per barrel and as high as US$115 per barrel in some markets, Guyanese oil companies were actually sourcing refined petroleum products from their established suppliers at prices in the range of US$130 per barrel. In fact, Minister Singh pointed out, the quoted price for the last shipment of gasoline loaded for Port Georgetown was US$126 per barrel, while the corresponding price for diesel stood at US$131 per barrel.
While the extraordinary external price increases observed are the result of well known developments in the major oil-producing centres, especially in the Middle East, they have the potential to exert significant impact on economies that are large oil importers and those that are small economies dependent on imported oil.
Minister Singh pointed out that Guyana had made considerable progress in recent years to consolidate its resilience to external shocks, such as adverse commodity price movements. Nevertheless, as long as Guyana remains as dependent on imported oil as it currently is, it will have to continue to contend with the reality of exposure to such developments.
It is for this reason, the minister emphasised, that government has been working so intently and assiduously to ensure the success of the Amaila Falls Hydropower project, which would significantly reduce Guyana’s fuel import bill and minimise the impact of fluctuating fuel prices on the cost of generating power. It is also for this reason that government continues to actively encourage activities in petroleum exploration, with the prospect that Guyana can, in a few years, become a producer and exporter of oil.
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