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At a news briefing in the boardroom of the Ministry of Finance yesterday, the minister said that the Government, after examining the consequential impact the recent escalation in the international market price for the two commodities has had on various sectors of the domestic economy, had taken a decision to reduce the Consumption Tax on both gasolene and dieselene.
"With immediate effect, the C-Tax on gasolene has been reduced from 50 percentage points to 35 percentage points...and the C-Tax on dieselene has been reduced from 25 percentage points to 20 percentage points", the minister announced.
He added that, in the case of dieselene, this has been the third reduction in recent times, the original Consumption Tax rate having been 50 percentage points.
Kowlessar said that while this reduction will result in a loss in revenue to the Government, "we have taken this move so as to bring relief to the travelling public, the manufacturing sector, farmers, fishermen, etc."
"In light of this reduction in Consumption Tax, Government does not expect that there will be any increase in public transportation fares or in prices of other products," he said.
He stressed that it should be noted that, "even with a suggested retail price of $415 per gallon of gasolene, and a $369 per gallon for dieselene, the profit margin will still be about $70 per gallon."
Minibus operators have been pressing commuters to pay higher fares since the beginning of this week.
The tax reductions were announced after a meeting between Minister of Tourism, Industry and Commerce, Mr. Manzoor Nadir and representatives of minibus bodies.
The Ministry of Tourism, Industry and Commerce in a press release said that on the request of the operators, it was agreed that gasolene will be brought down to $420 per gallon and there would be no increase in fares.
According to the release, minibus operators have decided to "hold" on the fare increases based on this decision by the Government.
It also stated that in three weeks, the parties will meet again to discuss the increasing costs faced by minibus operators.
At the beginning of this week, minibus operators from various routes had 'downed' tools to press demands for fare increases since fuel prices had gone up by about $100 per gallon.
On Tuesday, minibus operators from Better Hope, East Coast Demerara, held a peaceful demonstration for fare increases.
Minibus service to South Georgetown "Route 41" was also interrupted Wednesday, when operators gathered at the 1763 Monument Square to decide on a new fare structure.
Yesterday, operators of the Georgetown to Timehri run, "Route 42", joined other operators of the East Bank corridor in lobbying for fare increases.
Some 30 buses converged along Ramp Road, Ruimveldt and the high bridge at Houston to make their case for new fare structures.