Finance Minister Dr Ashni Singh has indicated that the government is monitoring the hike in fuel prices and will take appropriate action depending on how the situation evolves.
He made the comment during an interview with media operatives on Monday, where he explained that the system whereby Government reduces Excise Tax when global prices are high and increase the tax when it is low is still in place.
“We as a Government had put in place an arrangement whereby, we adjust the Excise Tax, depending on the world market price for oil. And this is a mechanism we put in place since we were last in Government. And it’s a mechanism we have reactivated since we returned to Government.”
“Essentially how the mechanism works is that when gas prices are low, we adjust the Excise Tax rates upwards. When gas prices are high, we adjust the Excise Tax rates downwards. Essentially, we cushion the impact of the world market price on the consumer,” he said.
According to the Minister, the Government continues to monitor oil prices closely, including the oil prices on the world market and the fuel prices at the pumps on the local markets. Oil prices have particularly been affected by the COVID-19 pandemic.
“We continue to monitor prices. What has essentially happened is that world market prices have been increasing very steeply in recent weeks and months. A couple months ago we did reduce the Excise Tax rate. We reduced it from 50 to 35 per cent. That helped, but of course prices have continued to increase,” he said.
“I would say it’s something we continue to monitor closely. And depending on how it evolves, we’ll make the appropriate decision at the appropriate time. But we are monitoring the situation very closely. We’re keeping a close eye on world market oil prices and prices at the pump.”