Gov’t foregoes billions in taxes, offers subsidies to keep prices stable – VP Jagdeo

Vice President Dr. Bharrat Jagdeo, at a press on Thursday, highlighted what he said was the government’s substantial intervention to mitigate the impact of global economic pressures on local fuel prices.

Jagdeo detailed that the government has forgone approximately $80 billion in taxes by eliminating a 50 per cent excise tax on diesel and gasoline. This move was intended to offset the impact of rising international commodity prices and inflation and Jagdeo believes it has done just that.

“We are foregoing over $80 billion of taxes by removing a 50% excise tax on fuel on just two things, on diesel and gasoline. Nearly $80 billion of foregone taxes that we gave up because we removed the 50% excise tax. So that’s 80 billion Guyana dollars. And what does it translate into for the individual… for every gallon of gas that you buy, or every gallon of diesel, the government basically subsidizes it $500 Guyana dollars,” the VP explained.

Jagdeo emphasized that this measure has helped stabilize the cost of production and transportation in Guyana, despite global increases in fuel prices. “Even though global fuel prices have surged, our intervention has kept local transportation and production costs stable. Unlike other countries, where residents and industries face higher costs due to increased fuel prices, we have managed to keep these costs constant.”

He compared Guyana’s approach to international practices, noting that only few countries have implemented similar measures on such a large scale. “In the United States, higher fuel prices have become a significant political issue, but here in Guyana, we have managed to maintain stable prices despite our reliance on imported fuel.”

Jagdeo also highlighted the government’s efforts to support the Guyana Power and Light (GPL) company, which has benefited from a fuel subsidy ranging between USD 66 million to USD 70 million. This support has prevented a potential 30% increase in electricity bills, which would have otherwise been necessary to cover the higher costs of fuel.

“The government’s subsidy ensures that the electricity rate remains at 22 cents per kilowatt hour instead of rising by an additional eight to ten cents per kilowatt hour,” Jagdeo said. “Every time you receive your electricity bill, you benefit from a 30% subsidy that would have otherwise led to significantly higher costs.”

Dr. Jagdeo reiterated that these measures are designed to benefit every Guyanese citizen, emphasizing that the government’s interventions have been crucial in shielding the public from the full impact of global economic fluctuations.