Minister of Finance Dr Ashni Singh announced yesterday that government had recently reduced the excise tax on diesel from 20 percent to 15 percent as a result of the upward movement in the world market price for oil and in particular as a result of increases observed in the price at which diesel is being obtained from external suppliers.
According to a press release, the finance minister said that this decision was taken at a time when external conditions, including developments in the Middle East had driven the price for crude oil up to US$100 per barrel, compared with less than US$80 per barrel just four months ago.
The reduction to the excise tax on diesel was effected in order to contain the pass through of the observed external price movement to the domestic market, and in particular bearing in mind that diesel is a critical input in the productive sector, particularly in industry and agriculture, the minister explained.
Singh also noted that government is continuing to apply a concessional rate of excise tax on gasoline and furthermore the administration charges no excise tax on kerosene.
On previous occasions when adjusting the excise tax on fuel products, Minister Singh had stated that the government’s stabilizing arrangement where fuel taxes are lowered when prices are rising and upward when prices are falling served as a very effective mechanism to insulate the Guyanese economy from the wide swings that were observed in fuel prices on the world market in recent times. The government would continue to use this mechanism as appropriate going forward, the release added.
