Tony Vieira's Comments
18 October 2017

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Fuel Prices
(Aired 10 May 2005)

    I cannot tell you how many people had asked me to do a commentary on the findings of the Commission of Inquiry and the reinstatement of Ronald Gajraj as Minister in this country, my position was that since the International Community were condemning the situation as vehemently as we were, Dr. Luncheon's non negotiable position was going explode right in his face. It had to, since this was one time when the entire International Community were as outraged at what was going on as we were, so anything that I had to say on this matter would be unnecessary.

     Ladies and gentlemen we may have this perception that the International community is not looking on at what is going on here, but they are, they are mostly diplomats so they will not usually make open statements of condemnation as they did in this matter, and that is why I knew that the PPP were not going to get away with this atrocity, so there was no necessity for me to comment on it. And simply condemning what they perceive as wrong doing by any government does not constitute interference with that country's sovereignty, if they had tried to do something about it that would be a different matter.

     So since nobody else has thought of it, tonight, on behalf of all right thinking Guyanese, I want to thank the International Community for their condemnation of the actions of the PPP in the Gajraj matter and for the result which their condemnation yielded.

    And I also want to congratulate the opposition, all of them, except Nadir of course, for standing together and for the restraint they showed in this entire affair.

    Actually tonight I want to talk about fuel. Especially as it pertains to Diesel since our fishing industry which brings in more foreign exchange than rice is about to collapse.

    At the risk of breaking the law I will deal in gallons since my mind is not programmed to deal in litres. The Standards Bureau will just have to forgive me.

   In my commentary gasohol E85 aired on the 28th August 2001, I told you that we import 25 million gallons of gasoline a year for our cars and that in the 6 months previous to my commentary in August 2001 the average price of a gallon of gasoline was US 89 cents landed here in Guyana, using the Bank of Guyana statistics for 2001 that would have been at an exchange rate of 191-1 or G$170 a gallon. Now let us understand what this price was for, this was for on going exploration for new oil fields, drilling and pumping the oil out of the ground, transporting the crude to the refinery, refining it to its various components, oil, diesel, gas etc, storing it, taking it to the ships and shipping it to Guyana, but at the gasoline station when the Guyana Energy Agency [GEA], the fuel distributors and fuel retailers got done with putting on their taxes and mark-ups on it here in Guyana, we ended up paying G$347 a gallon. That is 100 percent more than this fuel cost us landed here, now the GEA was collecting 50 % Consumption Taxes on this fuel which made the price G$255/gallon and the wholesalers and the retailers [the fuel companies] were making 92 dollars a gallon. Now based on a 25 million Gallons a year usage, the fuel distributors/retailers made 2.3 billion dollars and the government made 2.1 billion Guyana dollars in 2001 on our gasoline alone.     

    last month April 2005 a shipment of Gasoline was received here in Guyana, the price per gallon in Guyana dollars for this fuel was G$402.32 when the government's 35.40 % Consumption Tax was added, this raised the cost of this fuel to G$563.25/gallon when this gas is sold at the pump, the price to us Guyanese will be G$659.17 cents per Gallon! So to take this fuel from the ship to the pump including storage, the fuel companies are going to get 2.398 billion dollars this year based on an annual usage of 25 million gallons. But the government notwithstanding having reduced the consumption taxes to 35.40% from 50 % are collecting 160.93 a gallon or 4 billion dollars based on a 25 million gallons a year usage, nearly double what they made in 2001, they are making more profit on this situation than OPEC.

     Now we come to the really weird part of this equation the price of diesel fuel is inextricably linked to our agricultural industries especially the Fishing Industry and whilst the price of diesel is rising 175% from July 2002 to April 2005 the price of fish has been declining, there are two facts that every Guyanese should know 1. The fishing industry in this country earns more foreign exchange than rice does and 2. under our very noses it is dying because even though we were the 8-9 largest supplier of shrimp to the US in 2003, our production has been declining whilst the trawler owners haggle with the government over the consumption tax on fuel so we have lost ground and are now the 13th largest supplier of shrimp to the US in 2004, here are the export figures of Guyana's shrimp to the US since 2001, in 2001 we exported 20.3 million to the US, in 2002 it was 22 million Lbs. in 2003 it was 25.2 million Lbs., and in 2004 it was 18.6 million Lbs.  

   Now before I tell you how much the consumption tax on fuel for trawlers is, I have to tell you that fish, especially prawns, exports to the US is money in the bank and whilst the price of fuel is high today it is far more likely to come down after the war in Iraq is over and the world sorts out China's insatiable desire for fuel at any price, making shrimping a more viable long term industry than sugar so let's stop having pipe dreams for the survival of our sugar industry, we are wasting time we should be looking at alternatives right now! I am saying this as a Vieira, with family which has interests in Sugar Cane.   

    The government has now dropped the consumption tax on diesel to 20 %, the price of the last shipment of diesel fuel landed here in April at G$383 Guyana a gallon and after consumption tax was added the price became G$460 a gallon, but this same fuel is being wholesaled at G$573 a gallon to the agricultural sector. So the wholesale distributor whoever they may be Shell, Texaco etc. are making 104 dollars a gallon, now here is a government under pressure of losing another industry and is dropping the consumption tax on diesel to 76 dollars a gallon whilst the distributors are collecting 104 dollars a gallon on the same fuel! Using an estimated consumption of 10 million gallons for the fishing industry alone, that's a whopping 1.04 billion dollars a year, to this we have to add the 2.4 billion they are racking up on our gasoline, that comes to nearly G$4 billion this year! And remember we have not yet looked at the diesel usage for commerce and the other agricultural sectors such as sugar and rice so the distributors' share of this pie could go as high as 5.4 billion dollars this year! And that is why our fuel costs more than anywhere else.

     Now I am all in favour of private enterprise, even Freedom House will agree, it's the only thing we agree on, Tony Vieira is a capitalist, but there are rules ladies and gentlemen fuel distributors should not be making these huge profits whilst driving another capitalist operation, which is their customer, into the ground and the country along with it, since this is one of our more important industries. And no government should be extracting such huge fuel taxes from such a poor nation in these hard times.