Jan 19, 2016 News
-Badal urge linking fuel sales to world prices
By Leonard Gildarie
World prices for oil yesterday recorded its lowest in 13 years, leaving a number of big producing
But it is unlikely that Guyana, an importer, will see its consumers smiling or any noticeable benefits filtering down to the pumps across the country anytime soon.
The prices on the world market fell below US$28 per barrel during trading yesterday but recovered slightly, staying under US$29. Analysts are even predicting price to fall below US$25.
Currently, Government is collecting up to 50 percent Excise Tax on every barrel of gasoline and diesel coming in– monies that Government says it can ill-afford to lose now because of its under-performing key sectors.
That Excise Tax is the highest since last year when prices started sliding on the world market. It had stood then at 45 percent. A decision was reportedly taken to hike the tax to 50 percent in the last quarter.
At the SOL gas station on Regent Street, gas was retailing for $190.90 per litre while the GuyOil service station not far away, had it for $190. This works out to about $860 per gallon. In the US, in New Jersey, the service stations were averaging around US$1.65 per gallon while in Queens, New York where taxes are higher, for US$1.99- or about G$400 per gallon.
Yesterday, asked whether his party, the Alliance For Change (AFC), will be lobbying for a drop in the current 50 percent tax, leader and current Vice President/Minister of Public Security, Khemraj Ramjattan, said it is unlikely.
“As the AFC leader, I would love to see a reduction but we (Government) will have to make a collective
decision. And because there is a lot of expenditure we have to incur in relation to the social projects we have, the argument will forever be made that revenues will have to be taken in somehow, to carry them out.”
The AFC leader said that because of poor world prices for rice, sugar and even gold, the shortfall in revenue is being felt.
“And so it might not be the…(best)…time to carry that down. I can see an argument and I can make the argument as to why we just can’t carry it down, especially in the context of our three primary products… the current prices on the world market.”
It is always desirable, Ramjattan argued, that as the world prices go down, that the country benefits with a few extra dollars “here or there”.
“…But indeed when our world market prices for all our key products go down, which brings in the revenues, how do you get the revenues to run the social projects. It is extraordinarily difficult. So we can have the benefit of a reduction, but we will have to run with the burdens also of the lower revenues for sugar and gold and rice and so on, and that is the constraining factor that I will argue why it should not be done at this time.”
But while Ramjattan was arguing for the current situation, one of the country’s top businessmen, Robert Badal, owner of Pegasus Hotel and Guyana Stockfeeds, believed that Government should have fuel prices indexed to world market price, and publish a weekly advisory in the local media without further delay.
“Since the last half of 2014, international crude oil prices have plunged to more than a third to under US$30 from over $100 per barrel. This has done a great deal economically in oil importing countries all over the world,” Badal noted.
Sadly, he said, this is not the case in Guyana. “When oil prices were over US$100 per barrel and increasing, the local oil cartel was adjusting prices every week even though they were not having weekly shipments. Now that those prices are now a third what they were in 2014 those companies have all held on to high prices.”
The businessman noted that the last reduction was in April last year when he raised the matter publicly. The then former Finance Minister, Dr. Ashni Singh, slashed the price by 30 percent.
“International prices have since halved what they were then, yet a reduction is yet to be made. The local business sector in particular need lower fuel prices to make their businesses and exports more competitive. So, too, do the wider public. No single item in an economy reduces poverty to the level as lower fuel prices does since it affects everything in daily life.”
The businessman noted that it’s the Government’s responsibility to ensure that a competitive price is offered for fuel.
“The relevant Ministry should set up a weekly advisory on fuel prices indexed on prevailing world market price and publish this in the local media. Otherwise the cycle of low fuel prices would soon end with no benefit to Guyanese.
“When prices were going up we were the first to be charged; when it is down we are consistently denied its benefit. How unfortunate, even as we are the poorest in the hemisphere, we are still being asked to pay the highest price.”
The truth is that countries far richer than Guyana are charging more than Guyana at the pump. The cheapest fuel is sold in Venezuela—US$0:02 per litre. Hong Kong is selling fuel at US$1:30 per litre. Guyana is selling at US$0:95 per litre, slightly higher than Trinidad at US$0:85 per litre.
Sep 22, 2021Kaieteur News – The National Sports Commission yesterday covered in totality, the cost for Carlos Peterson-Griffith to attend the 2021 World Classic Powerlifting Championships in Halmstad,...
Sep 22, 2021
Sep 22, 2021
Sep 22, 2021
Sep 21, 2021
Sep 21, 2021
Kaieteur News – A hive of activity is taking place at present in New York. The General Debate of the General Assembly... more
By Sir Ronald Sanders The public health and economic impact of the COVID-19 pandemic has rightly focused the attention and... more
Freedom of speech is our core value at Kaieteur News. If the letter/e-mail you sent was not published, and you believe that its contents were not libellous, let us know, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]