Gov’t cuts C-tax on fuel
Calls for freeze on commuter fares

Stabroek News
January 10, 2003

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The Government has announced an immediate reduction in the consumption tax on gasoline and diesel in response to the sharp increase in local fuel prices and the knock-on effect of fare hikes for commuters.

Minister of Finance Saisnarine Kowlessar told the media yesterday the C-tax on gasoline “has been reduced from 50 percentage points to 35 percentage points and the C-tax on diesel has been reduced from 25 percentage points to 20 percentage points.”

In the case of diesel, Kowlessar noted that this reduction was the third in recent times, the original C-tax rate being 50%.

He said while the reduction will result in a loss of revenue to the government, the move was taken to bring relief to the travelling public, the manufacturing sector, farmers and fishermen among others. Kowlessar said it should be noted that with a suggested retail price of $415 per gallon for gasoline and $369 per gallon for diesel the profit margin for gas stations would still be $70 per gallon.

And in light of this reduction, he said the government does not expect there would be any increase in public transportation fares or in the prices of other products.

In related developments, the Minister of Tourism, Industry and Commerce, Manzoor Nadir and the Consumer Division which falls under his portfolio yesterday met with representatives of mini-bus associations where he informed them of the reduction of the consumption tax.

A Ministry of Tourism, Industry and Commerce release said that mini-bus operators have agreed to hold off any fare increases and the parties will meet again in another three weeks to discuss the increasing costs faced by them. The release emphasised that as government has agreed to operators’ requests to bring down the cost of gasoline and diesel there should be no fare increase.

But while some minibus associations have agreed to stay increases at least for the next three weeks, up to late last evening many operators were still enforcing increased fares.

Acting President of the Guyana Public Transportation Association (GPTA), Compton Giddings however said his association would abide by the agreement until January 30th, when they would begin negotiations for the new increases. And he said following negotiations for increases, the GPTA would be looking for the Ministry to endorse these.

But according to the President of the General Minibus Association of Guyana (GMBA), Lylon Weithers, the GMBA would not budge from the new increases.

Speaking with Stabroek News, Weithers said despite the reduction of the C-tax, operators could not afford to transport people at a loss, which he claimed they were doing with present maintenance costs and the increased fuel prices. He further added that it was unfair for the government to attempt to regulate prices for minibuses, since there were many other sectors where there was no price control.

On routes 32 (Georgetown-Parika), 40 (Kitty-Campbellville), 41 (Lodge-South Ruimveldt\East\West Ruimveldt), 44 (Georgetown-Mahaica) and Main-Lamaha), `car parks,’ many operators enforced new fares, while those who held off on the increases were in the minority.

On Route 42 (Georgetown-Timehri), commuters were left stranded for the better part of the day as many operators staged a strike for increased fares. Many of the striking operators disrupted the operations of other minibuses still working.

Up to late evening commuters were huddled at the Route 42 park awaiting transportation. Although some operators worked, they did so with the increased fare structure. Many of these minibuses, were however only `short-drop buses which travel from Georgetown to Grove. One operator, Richard Small, plying the route from Georgetown to Mocha\Arcadia, said they were still transporting but needed to raise fares with the fuel increases. He said they increased fares on adult passengers, but held off on children, since they were still considering the needs and limits of consumers, though he said this could not be maintained.

At the Route 50 (Georgetown-Rosignol) `car park’ there were no increases on passenger fares.

Minister Kowlessar, asked about a possible reduction in the C-tax on aviation fuel and kerosene, said that the government would also be looking at those two commodities for which prices have also risen noticeably in recent months. Some operators of aviation services have told Stabroek News that increases in fares are imminent because of the fuel increase. (Miranda La Rose and Andre Haynes)

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