Finance Minister Dr Ashni Singh announced on Thursday, February24th, that government recently took steps to reduce the excise tax on diesel from 20 to 15 per cent as the world price for oil increased, and diesel prices also increased.
In making the announcement, Minister Singh indicated that this decision was taken at a time when external conditions, including developments in the Middle East, had driven the price for crude oil to over US$100 per barrel, compared with less than US$80 per barrel just four months ago.
Minister Singh stated that the reduction in the excise tax on diesel was effected in order to contain a spillover price increase in the domestic market, particularly since diesel is a critical input in the productive sector, namely industry and agriculture.
The minister also pointed out that government continues to apply a concessional rate of excise tax on gasoline and charges no excise tax on kerosene.
Minister Singh had stated that the government’s stabilising arrangement, whereby fuel taxes are adjusted downward when prices are rising and upward when prices are falling, served as a very effective mechanism to insulate the Guyanese economy from the widely-fluctuating world fuel prices. He indicated that this mechanism would continue to be used as appropriate.
Reuters news agency reported that oil surged to two-and-a-half years’ highs, near US$120 a barrel, on Thursday as the revolt in Libya choked exports.
Brent crude jumped 7.5 per cent as the revolt in Libya cut off up to three-quarters of the OPEC nation’s 1.6 million barrels per day production, according to Italian oil company ENI, a top player in Libya’s oil sector. Forces loyal to Muammar Gaddafi launched a fierce counterattack, fighting gun battles with rebels, who have threatened the Libyan leader by seizing important towns close to the capital and key Libyan oil and oil-products’ terminals.
