Gas price, bureaucracy and corruption

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Dear Editor,

Since taking over the levers of power in Guyana the PNC led APNU+AFC regime has displayed a remarkable lack of concern for people’s welfare. The most recent example of this is its attitude to the rise in the price for fuel in Guyana.

The regime has turned Nelson’s eye and a deaf ear to the cries of the people. They have totally ignored the protests of minibus and taxi drivers throughout the land.

In the recent past, the PPP/C administration had to deal with a similar situation on many occasions. Its approach was totally different from this APNU regime.

It is well known that fuel is a very strategic commodity. It is an energy product. It is involved in all or almost all economic activity. Therefore, any price movement is bound to have an impact on people’s welfare.

The PPP/C government did a lot of creative things to keep the price stable.  When the price goes up internationally the PPP/C administration adjusted the taxes downward. When it goes very high we often remove some taxes completely.

On the other hand, when the price of fuel falls then the taxes were reintroduced. In that way, the price at the pump remained relatively stable.

Indeed, I can recall at one time the price of fuel fell drastically. In that situation, we thought that people should benefit more from the price fall.  Even in those circumstances, we reduced the taxes so our people could benefit. The consumers of electricity from GPL benefitted due to reducing electricity bills.

The PPP/C administration did more than that. It used the state-owned Guyoil to regulate the price. As Guyoil reduce its price at the pump, the private gas station owners had to follow suit to keep up with the competition.  Therefore, the consumer benefited.

If you contrast this with the actions of the PNC led APNU regime you will see a great difference.

While the PPP/C used Guyoil to keep prices down, this APNU regime is using it t facilitate smuggling and corruption.  Nothing is being passed on to the small man.

The same could be said of GPL. When the PPP/C left office the international price for a barrel of oil was US$120. Just three months after prices fell dramatically. It went to as low as US$15.00 per barrel. It then crawled up gradually. It is now about U$70 per barrel.

Yet no one got any discount on their electricity bill or any relief at the gas pump.

A clear indication of the parasite nature of the APNU+AFC regime.

The policy of the PPP/C made good economic sense as well. It kept transportation costs down for workers and, therefore, reduced the pressure on government and employers for the increase in wages. That kept the cost of living down.

The same applies to the transportation of food items. By managing the price of fuel we managed to keep inflation at a low rate.

Indeed, this strategy of the PPP/C government, along with others, helped to reduce inflation from three digit figures that it was in the late 1980s and early 1990s to low single digit almost throughout the period that the PPP/C was in office.

It also helped in the processing and manufacturing sectors. These are areas where fuel prices impact greatly on the cost of production. By keeping the price stable it allowed those involved in manufacturing to be able to plan and remain competitive with the regional and international competition.

This APNU+AFC government has abandoned these very sensible policies. The big question is why?

In the first place, they are very aggressive to collect maximum revenues.  Taxes and licences are put on the donkey cart operators and on housewives kitchen gardens. People in micro business are not spared, they too are being hounded down. Taxes have become very oppressive and are killing small businesses and stifling initiatives. Established, reputable businesses are being pressured by GRA, forcing one hundred per cent inspection on them all the time. This is carrying up their costs which are passed on to the consumer.

The regime, by its policies, is taking out billions of dollars in taxes from areas like Region One. They are extracting much more than they are putting into the project, through taxation, particularly of fuel.

This is to service the huge bureaucracy that they have created. The elite are enjoying huge salaries and lucrative benefits. The administrative cost has gone up greatly. They are sucking those who produce or provide services dry to satisfy the Cadillac lifestyle that they have adopted. Frequent travels abroad with royal allowances is one of the means of enriching themselves.

Another reason for them refusing to ease the taxes on fuel is to help their friends who are smuggling fuel. By keeping the price high at the pump the regime is allowing the smugglers to make huge, super profits. The personnel manning the regime have an interest in this since they themselves benefit from handsome kickbacks provided by the smugglers. It is of great interest to examine the people who have been awarded licence to import fuel. It is more interesting to see how those licences are being used. This regime has handed out more import licence to persons to bring in fuel in three years than the entire twenty-three years of the PPP/C in office.

Only recently, a boat was held with fuel. The regime did its utmost to hide that incident. They could not.  However, they did help greatly by not putting the full penalties that are prescribed in the law. Unable to hide the incident anymore, the mild penalty they put was more to save face.

The regime will, therefore, do nothing to reduce or remove the taxes because this will affect the huge profits that the smugglers make, many of whom are close to the regime, and reduce the kickbacks which some people high in government receive. The people are being soaked to uphold the lavish lifestyle and massive corruption.

The regime cannot afford to care for the people because being sympathetic to the plight of the poor will slow down the rate at which this bureaucratic capitalist elite is amassing its wealth. This new class will not let such ‘trivial matters’ to get in its way.

So the people must bear the huge burden to satisfy the greed of the rulers.

Donald Ramotar

Former President

 

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