Fuel prices have come down

Nov 07, 2008 Features / Columnists

Raphael Trotman and his Alliance For Change went to Parliament recently to proclaim that the price of oil had plummeted on the world market to almost unbelievable levels in the wake of the financial collapse in the United States. He argued that this should see a corresponding drop in fuel prices locally.

This collapse spread to many global capitals to the extent that some of these governments in the heart of capitalism are adopting measures that were once considered socialist.

And on the heels of this financial collapse, the price of oil fell in the same way that it rose when global food prices soared.

The Guyana Government stepped in to cushion the people from the harsh impact of the rising oil prices and got no credit.

No one stopped to think that if the government had allowed market force to operate then the price of fuel would have reached almost unaffordable levels.

This decision by the government to protect the people was almost a non-event if one were to judge from the silence that followed.

And among the beneficiaries were the very critics who drive some of the largest gas guzzlers on the roads today.

When the oil prices began to fall these people started to call for lower fuel prices as though these things are automatic.

The government maintained its excise tax as a price stabilization measure and at the same time, to earn revenue that would help the people. But one can now assume that the critics wanted cheaper fuel because it suited them.

They were going to save money for reasons best known to themselves and to perhaps have some more money to fuel a lifestyle that is fast becoming irrelevant except among the very rich.

One argument that the critics made was that if the government lowered the price of gasoline and diesel then the cost of public transportation would go down and the people would be the major beneficiaries.

President Bharrat Jagdeo doubted that there would have been a lowering of transportation costs and said that he would prefer to garner money for people’s development than to help the owners and operators of public transport to enrich themselves.

Last week the government announced a massive drop in the excise tax on fuel so that the owners and operators of minibuses can in no way complain about the high prices of fuel and the need to charge the beleaguered traveler even more money.

This decision has been greeted by a stunning silence from the critics. Once more it is a non-event. However, things have not been left to chance because the government has called in the owners and operators of public transport to discuss an adjustment in the cost of transportation.

There has been a tacit agreement although the minibus owners say that they have not yet agreed on what they should charge.

One would expect that this would have been a simple decision since it was only recently that they were charging a fare commensurate with the cost of fuel.

The government is not averse to reversing certain decisions when faced with certain arguments so in light of the contention by the critics it has slashed its consumption tax.

It has decided to forego certain earnings although the global economic fall out will severely tax the public treasury.

The pundits say that there will be a decline in remittances; the Inter American Development Bank has already announced that it is going to slash funding to Guyana because of the global woes; and large projects are going to have a torrid time raising capital on the world market to undertake investments in Guyana.

This could see a contracting of the labour market, a reduction in personal income taxes that go to the public treasury and other spin offs. When people do not work there is less money for the National Insurance Scheme which actually serves as a repository for money that helps local investors.

The government firmly believes that the traveling public who should be the beneficiaries of this slashing of the excise tax would in turn help the economy because they would spend that bit more and so encourage greater imports which in turn would mean greater revenue for the government.

Government decisions are not made lightly because at the drop of a hat people are quick to blame the government.

This slashing of excise tax could see a spreading of the economic base to the benefit of the country. It is now left for the minibus owners and operators, and the taxi drivers to show their appreciation for their customers.

All eyes are on them to see their reaction to this new measure and if the expected is not done then no one should blame the government for any consequent decision.

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Fuel prices have come down

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