Finance Minister announces cut in excise tax on fuel; prices at pump to reduce

Dr Ashni Singh

Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh, tonight announced that Government will be reducing the excise tax on gasoline and diesel to ease the domestic impact of the recent sharp rise in the world market price for fuel.

In announcing the cut in excise taxes, Minister Singh observed that over the past few months, oil prices have risen steadily on the world market, from US$35 a barrel in late October 2020 to over US$60 a barrel at close of trade today. As a result of this steady increase on the world market, fuel prices have also been rising on the domestic market.

In order to minimise the impact on domestic consumers, particularly the travelling public as well as those productive sectors for whom fuel is an important input, Minister Singh announced tonight that the Government will be lowering the excise tax rate on both gasoline and diesel from 50 percent to 35 percent with immediate effect.

As a result of the reduction in the excise tax rates, the price at the pump will also be reduced with immediate effect. Specifically, gasoline prices are expected to reduce from $184 per litre to $170 per litre, and diesel prices from $170 per litre to $160 per litre.

Minister Singh explained that, during its previous term in office, the PPP/C Government had put in place arrangements to adjust the excise tax rate on fuel from time to time to cushion the domestic impact of world market price fluctuation, and that the current tax adjustment is being effected using this previously established mechanism.

Minister Singh emphasized that tonight’s adjustments are in keeping with the strong ongoing commitment by President Irfaan Ali’s Government to ensure that domestic customers are protected from sharp price escalation on the world market and from cost of living increases.