The major private sector bodies in Guyana today (Friday) made an urgent call for the government to intervene and adjust excise taxes to reduce the price of fuel and negate the harmful impact on the local economy.
In a statement issued moments ago, the Private Sector Commission (PSC), the Guyana Manufacturing and Services Association (GMSA) and the Georgetown Chamber of Commerce and Industry (GCCI) said “there are ways in which the government could stem the impact of the price increase on the local economy, in order to manage the foreseeable uptick in inflation and reduced economic activity.
“There is much that could be done by adjusting the excise tax so that businesses could remain competitive”.
Following is the full statement:
Fuel Prices have being constantly increasing over the past few weeks. In the past when there was a reduction in crude oil market price to US $44 per barrel in 2015, Government intervened to slash the retail price per litre from $219 to $153. However, although the world market price dipped below US $30 per barrel in 2016, the retail price per litre at the state owned pumps was $190 which was then reduced to $170 due to advocacy by the private sector for Government to intervene.
As the world market price for oil recovers, the local private sector has noted similar increases at retail outlets per litre of gasoline and diesel; from $180 in June, 2016 to $230 more recently in July, 2018. While this is commensurate with the rising price of oil on the world market, there are ways in which our Government could stem the impact of the price increase on the local economy, in order to manage the foreseeable uptick in inflation and reduced economic activity. There is much that could be done by adjusting the excise tax so that businesses could remain competitive.
As consumers, there are economic implications of higher oil prices. When gasoline prices increase, a larger share of households’ income is likely to be spent on it, which leaves less to be spent on other goods and services.
The same goes for businesses, whose goods must be shipped from place to place. The manufacturing sector that uses diesel and Bunker C for self-generation of power and steam are finding it difficult to cope with the increased cost as it has a negative impact on profits. The alternative is to increase prices of goods produced which is difficult to do in a competitive market.
On the commercial side, fuel costs account for a significant part of overall operational costs in distribution and transportation businesses.
We, therefore call upon our Government to intervene and adjust excise taxes to reduce the fuel price and negate the harmful impact on Guyana’s economy.