MINISTER of Finance Dr. Ashni Singh announced yesterday that Government recently took steps to reduce the excise tax on diesel from 20 to 15 percent, as a result of upward movement in the world market price for oil and, in particular, as a result of increases observed in the price at which diesel is being procured from external suppliers.

In making the announcement, Minister Singh indicated that this decision was taken at a time when external conditions, including developments in the Middle East, had driven the price for crude oil up to US$100 per barrel, compared with less than US$80 per barrel just four months ago.

Minister Singh stated that the reduction to the excise tax on diesel was effected in order to contain the pass through of the observed external price movement to the domestic market and, in particular, bearing in mind that diesel is a critical input into the productive sector, particularly industry and agriculture.

The minister also pointed out that Government continues to apply a concessional rate of excise tax on gasoline and, furthermore, that government charges no excise tax on kerosene.

On previous occasions, when adjusting the excise tax on fuel products, Minister Singh had stated that the Government’s stabilising arrangement, whereby fuel taxes are adjusted downward when prices are rising and upward when prices are falling, served as a very effective mechanism to insulate the Guyanese economy from the wide swings that were observed in fuel prices on the world market in recent times.