As Minibus strike continues … Govt. slashes excise tax on fuel

Apr 12, 2011 News

– Commuter urged not to pay fare increase, police to monitor

By Rabindra Rooplall

The government has slashed the excise tax on gasolene to 15 percent down from 20 percent and diesel, down to 10 per cent from 15 per cent.
And Minister of Tourism and Commerce, Manniram Prashad, said yesterday, that there is also an agreement that if the price of gasoline does not exceed $1,000 at the Guyoil gas stations there will be no discussion of a fare increase.
The various minibus associations were present at a meeting at State House with Minister of Transport, Robeson Benn, Minister of Tourism and Commerce, Manniram Prashad and President Bharrat Jagdeo yesterday.
However, the much touted United Minibus Union (UMU) which has been behind the strikes was not present.

Although some buses were on strike yesterday most of them turned out for work especially at the Route 42 Park.

“The United Minibus Union is not recognised. They didn’t show up…and they are collecting money from minibus owners who are complaining that they are being fleeced by this union…We are dealing with the Guyana Public Transportation Association, the General Minibus Association, the number 42 Minibus Association, the number 32 Minibus Association and several other associations that were present at the meeting,” Prashad stated.
Yesterday, some minibus operators of the Main-Lamaha-Hospital, Kitty-Campbellville, Sophia, West Ruimveldt, West Coast Demerara and West Bank Demerara, East Coast Demerara and East Bank Demerara had a partial strike.
The strike was planned by the United Minibus Union (UMU) for an increase in fare based on the rising fuel prices and other operational costs.
UMU claimed that it is representing minibuses from Route 31, 32, 40, 41, 43, 44, 45, 46 and 48.
Some of the buses assembled at Square of the Revolution while some just stayed off the road.
Recently, as the minibus operators plying the East Bank Demerara route (42) raised their fares, Government deployed several big buses in an attempt to ease the plight of the commuters.
Acknowledging that there was a planned countrywide strike by minibuses yesterday, Prashad said that did not happen and most of the minibuses worked although some were parked.
The Minister said that at the meeting the minibus associations asked for an increase in the fare, “but as we speak now gas is just $980 a gallon at the Guyoil gas stations…and President Jagdeo said he would further reduce the excise tax from 20 per cent to 10 per cent so it was in good faith even before the meeting started.”
He noted that excise tax was further reduced for gas prices in the past from 50 per cent, then to 30 per cent, to 20% and to its present level which he said was 10 per cent but which was in fact 15 per cent. The excise tax on diesel has been slashed to 10 per cent.
The lowering of the excise tax is to ensure that the price of gasoline remains below $1,000. He said that if the consumer had to pay the full cost, the price for a gallon of gasoline would be $1,400 per gallon. The government is absorbing that cost.
According to Prashad, Government also discussed the ideas of the Public Utilities Commission controlling minibus fares, but at the end of the meeting that option was not taken.
He said that several concerns were raised by the minibus associations and representatives of the taxi drivers association. He and Minister Robeson Benn have been mandated to address the various issues.
Adding that the buses that ply the Georgetown to Rosignol route have the best structure where a line system is used and monitored to the exclusion of ‘touts,’ Minister Prashad said that President Jagdeo urged other buses in the city to follow suit since there is too much chaos at the bus parks.
Noting that there was also a call to have one minibus association represent all the routes, Prashad said sometimes various minibus organisations represent the same route and they have different agendas and ideas. This issue will be addressed.
He said that people have a right to withdraw their services; however, minibus operators who are working must not be harassed, intimidated or threatened. Some operators revealed that they were made to endure such treatment if they did not comply with the strike.
“The Commissioner of Police and the Traffic Chief will be looking to address those issues.”
Prashad also noted that there is a free market system in Guyana and private gas stations can increase their price per gallon, however, at the Guyoil gas station which the government gives direct relief to is to benefit all consumers.
“The fare remains the same and there is no price increase and consumers don’t pay more. Don’t be bullied to pay; the police will be keeping a vigilant eye for those who want to exploit the situation and bully people into paying an increase fare, along with the touts who harass people at the parks.” Prashad said.
Prashad added that the Government took off the tax and duty for minibuses for the benefit of the consuming public. Minibuses under 2000cc pay $530,000 in flat rate of taxes since if they were to pay the duty, VAT and original sum it would be over $2M in taxes alone, which does not include the price of the bus.
He said a survey which was done recently indicates that spare parts have not gone up significantly since that attracted 30 per cent excise tax previously, but since the introduction of the 16 per cent VAT it was lowered.
Minister Robeson Benn recently noted that to cushion the impact on the working class, the government has the right to intervene in the public transportation market by deploying ‘big buses.’