With effect from Monday the government lowered the excise tax on gasoline from 50 to 30 percent while the tax on diesel was lowered from 40 to 30 percent, and there is still no tax on kerosene.

Minister of Finance Dr. Ashni Singh in making the announcement  indicated that this decision was taken in the interest of ensuring that Guyanese businesses and consumers would not have to bear the brunt of the upward movement in the world market price for oil that was observed in recent months, the Government Information Agency (GINA) reported yesterday.

The minister also noted that whereas crude oil was being traded at prices as low as US$37 per barrel in December last year, the commodity was now being traded at prices as high as US$70 per barrel. Singh pointed out too that while in December 2008 Guyana was acquiring gasoline at prices as low as US$46 per barrel, the most recent shipment of gasoline  imported into Guyana was acquired at US$85 per barrel.

According to Singh, government took the decision to reduce the excise tax in order to moderate the impact of these world market price movements on the domestic economy and on domestic consumers and producers.

The minister recalled that throughout the first three-quarters of last year, government had made a similar move by  reducing the excise tax on gasoline and diesel progressively as world market prices had increased. This initiative came at a cost of $4.2 billion in 2008, and the tax was only raised in the latter months of last year as the world market price eased.

At that time, Minister Singh had stated, GINA said,  that the government’s stabilising arrangement whereby fuel taxes are adjusted downward when prices are rising and upward when prices are falling was serving as a very effective mechanism to insulate the Guyanese economy from the wide swings that have been observed in fuel prices on the world market over the past year.

He indicated that this mechanism would continue to be used as appropriate going forward, GINA added.