Fuel price reduction leaves more money in people’s pockets – Finance Minister
The recent reduction in fuel prices means more money will be in the pockets of the ordinary man. Senior Minister in the Office of the President with responsibility for Finance, Hon. Dr. Ashni Singh said this is the main reason for the decision to slash fuel prices.
Government on Wednesday reduced excise tax on fuel from 50 per cent to 35 per cent, which Minister Singh said will have an impact at both the micro and macro levels.
“The relief on the fuel prices will enable consumers, they no longer have to pay that much for fuel so they have a few extra dollars they can do something else with. For businesses they no longer have to pay that much for fuel so they have a few extra dollars they can invest in something else or do whatever it is they will do with their additional cash flow to generate more economic activity,” the Minister said.
Dr. Singh noted that the PPP/C administration has always paid keen attention to what happens on the world market. He said the price for fuel on the world market increased from US$35 in October to over US$60 as of Wednesday. Minister Singh said monitoring the world market price for fuel led to Government’s timely intervention which relieves the financial burden on citizens.
“We are firmly committed to ensure that any possible shocks to cost of living are contained to make sure that consumers do not feel too sharp an impact as a result of world market price developments. So that is the backdrop to which the intervention was made. So basically, we implemented a cut on the excise tax rate, which then feeds into the price of the pump, so the price of the pump is reduced as well,” the Finance Minister stated.
Minister Singh said Government in its campaign manifesto committed to reducing burdensome taxes. A number of taxes were removed or reversed in Budget 2020. Budget 2021 which was read last Friday, also saw the removal of many taxes with no new taxes introduced.
Some of the budget measures includes the removal of Value-Added Tax on water and electricity, the increase in public assistance and old age pension, the removal of VAT from a range of food and household items and the increase of school grants to $15,000.
Annually, the measures in both budgets would see over $50 billion of disposable income pumped back into the economy, Minister Singh said.
“Those are all interventions that are designed to reduce the cost of living borne by Guyanese households, regular Guyanese households. Everybody pays for water; everybody pays for telephone and for data on their telephone and so we committed in our manifesto to ease this burden on people and we have already gone a long way in delivering what we promised,” he said.
Government’s decision to slash excise tax on fuel will see the price for gasoline reduced from $184 to $170 per litre and from $170 to $160 per litre for diesel.