By Sasenarine Singh
THE ongoing conflict in West Asia is exerting considerable upward pressure on global oil prices, with crude-oil prices in early March 2026, surpassing US$100 per barrel. For Guyana, this is more than a distant geopolitical issue; it is a pressing economic reality with tangible consequences, since we must buy gasolene, diesel and aviation fuel and other refined petroleum products from the world market which is a matter outside of our domestic control.
In 2025, Guyana imported approximately 48,000 barrels per day of refined petroleum products at an average price of US$69 per barrel, according to the 2026 National Budget. Should the ongoing conflict in West Asia persist for another month, this could increase the country’s fuel-import bill by an estimated US$45 million per month (approximately G$9.5 billion).
During the COVID-19 pandemic, the government took the prudent and people-friendly step of reducing excise taxes on fuel imports from 10% to zero. This measure helped cushion the dollar-impact on the lives of our Guyanese residents and consumers, while supporting economic activities during a period of significant uncertainty. While effective, this policy intervention came at a considerable fiscal cost to the treasury, but this is what compassionate governments do. This is a trait easily associated with the Irfaan Ali government. With excise taxes now already at zero, Guyana’s ability to further adjust fuel taxation as a policy tool is significantly constrained.
At present, one of the limited options available would be to subsidise fuel imports; however, this would be both costly and difficult to sustain, particularly given that fuel and lubricant imports exceeded US$1.3 billion in 2025. In this context, constructive engagement and input from the Private Sector Commission would be both timely and valuable in identifying practical and collaborative responses.
International experience offers useful perspectives. In the United Kingdom, for example, the Automobile Association has encouraged drivers to limit non-essential travel, adopt car-pooling practices, and maintain moderate driving speeds to improve fuel efficiency. Evidence indicates that driving smoothly at speeds of 30–40 mph can significantly enhance fuel economy, while increasing speed by 30% above these levels may raise fuel consumption by as much as 25%. Maintaining proper tyre pressure further contributes to efficiency gains. Such measures, if adopted locally, could also have the added benefit of improving road-safety outcomes and reducing road-accident related deaths.
Meanwhile, major oil-importing economies such as China, South Korea, Thailand, and India have already adjusted domestic fuel prices upward in response to rising global crude-oil prices. By contrast, the Western Hemisphere, supported by significant crude-oil production (including recent expansion in Guyana), benefits from relatively greater resilience to such external shocks.
Notwithstanding these dynamics, the current situation reinforces the strategic case for Guyana to invest in its domestic oil-refining capacity. Establishing an indigenous oil refinery would help reduce exposure to geopolitical disruptions and the associated costs of maritime transportation of refined petroleum products to Guyana.
With national oil production now exceeding 900,000 barrels per day (supported in part by developments such as the Yellowtail project). With this information, there appears to be sufficient scale to consider a private sector-led modular and expandable oil refinery. Such an investment could reduce reliance on imported refined products, enhance local value added, improve the retention of economic benefits from Guyana’s natural resources and serve as a bankable project for the owners. While crude-oil exports continue to contribute significantly to the Natural Resource Fund, domestic refining of Guyana’s share of production could generate additional economic returns and lower transportation costs through more direct distribution channels to key demand centres, including Georgetown.
Moreover, a refinery could serve as a catalyst for broader industrial development, particularly in regions such as Berbice, which has been identified as a potentially suitable location for such infrastructure. The experience of Singapore is instructive in this regard. Through sustained investment in refining and petrochemical capacity, Singapore has developed into one of the world’s most efficient petrochemical hubs, supporting approximately 28,000 jobs in the sector. While Guyana’s context differs, the potential for meaningful employment generation and industrial expansion is evident.
Given its resource endowment, Guyana need not remain dependent on imported refined fuels over the long term. The development of domestic oil-refining capacity represents not only an opportunity for industrial advancement, but also a strategic investment in economic resilience, value creation and sustainable growth. Such efforts would complement ongoing initiatives, including the gas-to-shore project, being advanced under the leadership of His Excellency, Dr Mohamed Irfaan Ali.
