Vice President of Guyana, Dr. Bharrat Jagdeo announced on Wednesday that the government has reduced the excise tax on fuel to 0%, in response to growing anxiety about rising commodity prices.
The reduction applies to diesel and gasoline, and represents the fourth reduction in the excise tax since the new government assumed office in August 2020.
It was first reduced from 50% to 35% in early 2021, then to 20% later in the year, due to concerns about the rising cost of living due to supply chain disruptions. In the 2022 budget, the government announced a further reduction to 10% earlier this year. Then, following Russia’s invasion of Ukraine, the increase in fuel prices were more dramatic as Brent and WTI crude started to trade over US$100 a barrel.
The Guyana Revenue Authority (GRA) announced on Wednesday that the reduction to 0% would take effect immediately to cushion the global increases in fuel prices.
Government came in for commendation from the Guyana Oil and Gas Energy Chamber (GOGEC) President Manniram Prashad.
“GOGEC urges the relevant agencies to ensure that this reduction is passed on to the public,” the Chamber’s release stated.
The government has also committed that it will not hike electricity and water rates, despite state utilities raising concerns about now being in a financially unsustainable position. As for commodities, Attorney General Anil Nandlall said the government will not implement price controls.
President Dr. Mohamed Irfaan Ali continues to promote messaging on Facebook that the rise in commodity prices is not unique to Guyana. The President’s Facebook pointed out that the cost of living is affecting millions in Great Britain, Australia, the United States, Trinidad and Tobago, and Jamaica. The President also said that Russia and Ukraine produce 30% of the world’s wheat, and that this means a “wheat and bread crisis” is coming.
Government continues to come under pressure to make interventions to cushion the blows caused by rising commodity prices. GY$5 billion is budgeted to find solutions to the increasing cost of living. The President intends to hold national consultations on the way forward.
