Gasoline, Diesel prices to see immediate reduction as excise tax slashed

The Government has taken a decision to further reduce the excise tax on gasoline and diesel from 35 percent to 20 percent with immediate effect, resulting in a $15 per litre drop in the prices. This was announced in a late-night press release from the Ministry of Finance.

Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh, according to the statement, said the adjustment in the excise tax rate on fuel from time to time is part of the measures that the PPP/C Government will implement to cushion the domestic impact of world market price fluctuation.

The prices at the pump are expected to also be reduced with immediate effect, with gasoline prices expected to reduce from $213 per litre to $198 per litre, and diesel prices from $200 per litre to $185 per litre.

“This reduction will aid in cushioning the impact on domestic consumers, particularly the travelling public as well as those productive sectors for whom fuel is an important input,” the Ministry asserted.

The announcement came as the Government announced a 14.5 percent growth in the economy and is the second such reduction granted for the year.

In February 2021, the Government reduced the Excise Tax rate on both gasoline and diesel from 50 percent to 35 percent. Since this time, oil prices have continued to rise steadily on the world market, moving from over US$60 a barrel to over US$80 a barrel at close of trade on October 5, 2021. This steady rise in the world price has had a resultant effect with prices rising on the domestic market also.