With effect from this morning the excise tax charged on gasoline has been reduced from 30% to 20% to cushion the impact the increase in oil prices will have on domestic customers.
This was announced by Minister of Finance Dr. Ashni Singh yesterday, a Government Information Agency (GINA) release said. Government, GINA reported Singh as announcing, “is implementing a drastic cut to the excise tax charged on gasoline” and “the necessary instructions have been issued to reduce [it] by one third”.
Just last month Singh reduced the tax on diesel from 20% to 15%.
The government, according to him, also continues to charge no tax on kerosene, in order to ensure that this product is available to final consumers at the lowest possible cost.
Singh, according to GINA, explained 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.
The quoted price, he said, for the last shipment of gasoline loaded for Georgetown was registered at US$126 per barrel, while the corresponding price for diesel stood at US$131 per barrel.
These prices, Singh explained, have the potential to exert significant impact on economies that are large oil importers and small economies dependent on imported oil. Guyana, he said, has made considerable progress in recent years to consolidate its resilience to external shocks such as adverse commodity price movements like the current one.
However, as long as Guyana remains 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, Singh stressed, that the government has been working intently to ensure the success of the Amaila Falls Hydropower Project which is expected to significantly reduce Guy-ana’s fuel import bill and minimise the impact of fuel price movement on the cost of generating power.
It is also for this reason, the minister noted, that Government continues to actively encourage activities in petroleum exploration, with the prospect that it can become a producer and exporter of oil in the near future.
