Minister of Finance, Winston Jordan says Cabinet has discussed the increased fuel prices and is considering options carefully to avoid future negative effects on the country’s balance of payments.
“The issue about price increases for the minibuses is also engaging the attention of the Cabinet. Only last Tuesday at Cabinet this matter was raised and so we will have to find creative solutions to the problem of rising fuel prices. I understand though that in the past week or so prices have trended downwards. I believe prices have fallen back to about sixty-something dollars per barrel from the high seventy-something,” Minister Jordan said.
In addition, he noted the opposition calls for a previously used tax formula to be employed to ease the burden of increased fuel prices on citizens. However, he said while the previous administration was able to forego taxes to maintain fuel prices in the past, the conditions now were different.
“They say they had a formula in place where they used to reduce the excise tax so that people used to buy gas at the same price they used to buy before. I’m aware that indeed they had such a formula, but this is not only about whether government will still get the same amount of revenues that they had budgeted. It also has that external side… the side that has to do with finding the foreign currency to buy the same quantity of gas that you were consuming when the prices were low,” Minister Jordan said in a Department of Public Information (DPI) release.
In September 2017, world market prices for fuel increased due in part to the hurricane conditions in the southern hemisphere, which resulted in GuyOil adjusting the prices in gasoline, diesel and kerosene to a higher cost.
Again, in February of this year, Guyana Oil Company (GuyOil) adjusted its prices upwards. GuyOil currently sells gasoline for approximately $220 per litre.
Jordan’s comments comes on the heels of protest from Rice farmers and producers, on Thursday last in front of the Ministry of Finance office, who were calling on Government to review its tax policies on fuel with a view to ease the “burden” on the productive sector.
At the protest demonstration, the Guyana Rice Producers Association (RPA) urged Government to reintroduce a sliding tax rate for rice farmers in light of the high cost of fuel and especially in light of ongoing period of land preparation.
While on the protest line, General Secretary of the RPA Dharamkumar Seeraj told the media that the sliding tax rate method is easy and would not add any unnecessary burden to the budget.
“The way it works is that when the price for fuel goes up on the World Market, the tax comes down so the price at the pump remains the same so it’s not rocket science and most importantly from the Government’s point of view, this will not affect the target budgeted for,” he explained.
Further, Seeraj reasoned that if the price for fuel increases and Government reduces the percentage of taxes on fuel, they can still achieve their target.
“If you implement that sliding rate, the country benefits. Production will go up, you’ll become more competitive on the export market and that is what a country needs,” he asserted.
The RPA said farmers, who are currently harvesting, have been experiencing an increase in transportation costs from an average of $200 to $800 per bag, because access to their farmlands is poor.
Additionally, most farmers are currently involved in land preparation exercises and sowing of their fields, where most fuel is being used compared to the crop duration, so the increase is coming at a really bad time for the farmers.
As reported, the fuel woes are compounded by challenges of readily accessing fertilisers owing to financial challenges.
The RPA has since said that the “good life” that the A Partnership for National Unity/Alliance For Change (APNU/AFC) Government promised was wanting, adding that the Administration’s inaction on the matter was not an option.
In April 2017, Mahaica farmers, whose main source of income is rice, along with cash crops, said that the taxation measures were “harsh” to them.