Excise tax on gasoline reduced by 60 percent

Jun 19, 2009 News

Minister of Finance, Dr Ashni Singh, has announced that the government has reduced the excise tax on gasoline and dieseline.
According to the Minister, the tax on gasoline has been reduced from 50 per cent to 30 per cent while the tax on dieseline has been reduced from 40 per cent to 30 per cent.
According to the Minister the move is aimed at buffering the cost of fuel which has been on the increase recently.
Dr Singh said that this decision was taken in the interest of ensuring that Guyanese businesses and consumers would not have to bear the brunt of the upward movement in the world market price for oil that was observed in recent months.
The Minister pointed out that, whereas crude oil was being traded at prices as low as US$37 per barrel in December of last year, the commodity was now being traded at prices as high as US$70 per barrel. Minister Singh similarly pointed out that, while in December 2008 Guyana was acquiring gasoline at prices as low as US$46 per barrel, the most recent shipment of gasoline that was imported into Guyana was acquired at a cost of US$85 per barrel.
Dr Singh said that Government took the decision to reduce the excise tax in order to moderate the impact of these world market price movements on the domestic economy and on domestic consumers and producers.
He also pointed out that throughout the first three quarters of last year, Government had made a similar move, reducing the excise tax on gasoline and diesel progressively as world market prices had increased.
This initiative came at a cost of $4.2 billion in 2008, and the tax was only readjusted upwards in the latter months of last year as the world market price eased.
At that time, 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 was serving as a very effective mechanism to insulate the Guyanese economy from the wide swings that have been observed in fuel prices on the world market over the past year. He said that this mechanism would continue to be used.