Other petrol dealers match Government price drop

Dec 13, 2008 News

Two days after the Government announced a drastic reduction in the price of gasoline, the other importers of mogas (gasoline and diesel) have matched the Government-induced prices.

On Thursday, the Government announced that the price of gasoline had reduced from $777 per gallon to $555, based on a lower acquisition cost.

The other petrol stations, with their supplies acquired at the higher fuel prices, maintained the old prices and experienced a marked drop in customers.

Yesterday, General Manager of Sol (Guyana), Ken Figaro, said that the petrol importers had been seeing some big drops in prices lately. Today, those prices are at their lowest for a long time.

“Crude oil prices have fallen drastically and the refined products often follow the crude oil trend. The only time this was different was during the hurricanes in the Gulf,” Mr Figaro added.

Six weeks ago, Government slashed the price of fuel from $1,058 per gallon to $777 per gallon.

The oil prices had begun to fall, and, in Guyana, the Government was adjusting the excise taxes upwards. On September 4 last, Government hiked the excise tax on gasoline from seven per cent to 20 per cent.

The excise tax on diesel moved from zero per cent to 14 per cent.

On October 29, the excise tax on gasoline moved from 20 per cent to 50 per cent, while that on diesel moved from 14 per cent to 30 per cent. On December 11last, the excise tax on diesel moved from 30 per cent to 40 per cent.

This latter movement of the excise tax on diesel coincided with the importation of diesel by Sol, the third time in succession that the hike in excise tax coincided with fuel imports by the company.

“This could be coincidental,” Mr Figaro said.

Asked about the further lowering in the cost of fuel at the pump, Mr Figaro said that his entity has had to match the Government price to be competitive.

He said that there was old stock on hand, and even as the prices were falling on the world market, Sol had already bought fuel at the higher price.

Mr Figaro said that his company imports fuel every two to three weeks. It had just imported a stock last weekend, so the sudden drop in prices meant significant losses to the company and its retailers.

The supplies of diesel were low, so the loss in that area was not as great.

As a result, some of the retailers maintained the higher prices until they reduced supplies.

However, with the shift in customers, the movement of the supplies was slow, but the urgency to match the prices at the Guyoil pumps meant that the retailers had to take losses.

Some are still maintaining the higher prices, and may continue to maintain that higher price for another day or two, according to Mr Figaro.

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Other petrol dealers match Government price drop

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Other petrol dealers match Government price drop

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