This week’s announcement by Finance Minister Dr Ashni Singh that fuel prices at GuyOil pumps would have been reduced by Wednesday could have come earlier, though the fact that it has come at all is a blessing for both ordinary consumers and for the business community as a whole.
One might add that it is to be hoped that by the time this editorial is published the various other petrol dealers would have also reduced their prices since (as the Finance Minister has already said) a significant disparity between GuyOil prices and those of privately-run petrol stations could create a discomfiting situation.
There is, of course, much that can be gained from a drop in fuel prices and the industries that come readily to mind are: transportation, mining and manufacturing; though in the case of transportation it is probably unlikely that the downward adjustment in fuel prices will bring about an immediate and commensurate adjustment in taxi and minibus fares. The difficulty here is that there is no collective decision-making mechanism in the private transportation sector and if precedent is anything to go by many bus and taxi operators will see reduced fuel prices as an opportunity to make a killing.
Mining, of course, faces other challenges that offset the fall in the price of oil, not least the dramatic decline in the price of gold on the world market so that while downward fuel prices are likely to bring a measure of relief to miners, it has to be said that it comes at a time when other constraints makes cheaper fuel seem less attractive than it otherwise would have been.
One of the significant national advantages that can accrue from lower fuel prices ought to benefit a heavily oil-dependent manufacturing sector. However, here again, manufacturing at all levels in Guyana–but for a handful of exceptions–has been beset by a host of problems including depreciating equipment, high prices for imported raw materials and lack of access to external markets. Over time, the collective impact of these various negatives have wreaked havoc in the manufacturing sector, and in the case of the much smaller agro-processing industry, severely stunted its growth. So that the best that cheaper energy can do for the manufacturing sector is to provide a limited windfall from which it may only benefit in the short term, unless cheaper oil prices persist for long enough to provide the debilitated manufacturing sector with sufficient time and opportunity to effect the kinds of repairs and restore the kinds of efficiencies that can properly position the sector to benefit from cheaper oil.
Cheaper electricity is probably an obvious expectation in an environment of falling fuel prices. None of the aforementioned initiatives are likely to secure more public approval than a reduction in electricity rates. Indeed, long before this week’s announcement speculation had been rife about the likelihood of cheaper electricity rates. The government might of course argue that cheaper electricity rates had long been preceded by a hefty state subsidy to the power company over a protracted period though, with President Ramotar now having named an election date, one never can tell.
