President Dr. Irfaan Ali has signalled that the Government is examining a new suite of measures to protect Guyanese from future fuel price shocks, noting that the main tax lever used in recent years has now been fully exhausted.
In a broadcast address on Tuesday night, discussing the ongoing energy and cost-of-living pressures brought on by the conflict in the Middle East, Dr. Ali said his administration had already deployed “the full policy tool” available on fuel taxation by cutting the excise tax on refined imports to zero, saving consumers hundreds of billions of dollars since 2022.
“As a government, we have demonstrated the full policy tool that is available to us, that is a full adjustment, the excise tax to zero for a number of years now, we ask the private sector and providers of service also to work along with the consumer in this period of volatility,” President Ali said.
With that option now fully utilised, the President indicated that the focus is shifting to structural and logistical reforms aimed at lowering the cost of importing and supplying fuel over the medium to long term.
Dr. Ali said the Government is actively examining how to increase the scale of fuel imports in order to achieve better economies of scale and reduce per-unit costs.
However, he acknowledged that existing port and river constraints are limiting the country’s ability to receive larger, more cost-efficient vessels.
One of the main challenges, he explained, is that the Demerara River and port draft cannot accommodate large vessels, forcing importers to rely on smaller transshipment ships, which in turn drives up freight and final fuel costs.
“We know it’s a challenge. There are other tools that we’re looking at to see how we can increase the scale of products coming in, so that we can have more scale of products coming in,” he said adding: “One of the challenges of that, of course, is the Demerara River. The draft does not accommodate huge vessels coming in, so we have to use smaller transshipment vessels, which of course also affect the cost.”
To address this, the administration is considering dredging the river and investing in port infrastructure that would allow larger vessels to dock, a move the President said is an important part of reducing freight costs and reducing the cost of imports into the country.
Beyond shipping and port reforms, President Ali confirmed that the Government is “actively looking at partners” to establish a refinery in Guyana, leveraging the country’s growing crude oil production to secure supply and stabilise prices .
Although Guyana is now a significant crude producer, all refined products are still imported, leaving the domestic market exposed to global refining and transport disruptions.
“We are actively looking at partners who want to invest in a refinery here in Guyana, so that we can have that security of supply, and we can also have more price stability, given the fact that we are also producing our own crude,” the President said.
He stressed that while Government has already stretched its fiscal tools through zero excise tax and ongoing subsidies, additional relief will now depend on a combination of infrastructure upgrades, strategic investments and private-sector cooperation.
“I call upon all the stakeholders, the importers of refined products, to adjust their profit lines in this period of volatility, because it’s a period of volatility, it is not that the supply is not there, the supply is there, but a movement of supply is a problem,” he urged.