The Bhutanese Leading the way.
During the First Sitting of the 7th Parliamentary Session, the Member of Parliament (MP) of Bumdeling-Jamkhar constituency, Dupthob, raised a question to the Prime Minister (PM) on what the government is doing to bring down the fuel prices to the same as few months ago, considering Bhutan imports a lot of items from India.
MP Dupthob said within the short span of time, the price of fuel has increased a lot causing the price of imported commodities to rise as well. He said the common people are now finding it difficult to buy basic food items and drinks.
“What we could not understand clearly is – in the past the price of agriculture produce used to be quite low due to the Indo-Bhutan Friendship. But now, within short time, the price of the petrol and diesel is higher than that in the neighbouring countries. Ours is higher by about Nu 10 per liter. We would like to know how the fuel price came to this? It’s undeniable that about few days ago, the Ministry of Economic Affairs bore this concern and managed to decrease the fuel price by Nu 1 or 2, while for the diesel, the price has decreased by about Nu 8, from the Indian Government, itself. But even if that’s the case, the price is still higher than that of the neighbouring countries,” MP Dupthob said.
To which the PM replied, “I think there are two kinds of answers to that. For that first, we need investigate what caused the fuel price to increase and what we can do to resolve the issue. We have to see who monitors the fuel in Bhutan. After few years, STCBL has been established and we have about three private corporations. And even in India, it’s not from the Government, but there is a public-sector unit. And it is revised every five years or so. We have justified to the Indian Government that it is not appropriate to increase the fuel price in the current scenario, but we don’t have any power to dictate the price given the current situation like the pandemic, Ukraine-Russian conflict which caused ripple effects to be felt not only in our country but also many other nations. Due to these reasons, there is no saying if the price of the commodities and foods will increase again or what kind of regulations the countries in the world will come up with. So, to answer it clearly, the 100 percent of power to resolve the issue is not in the hands of the government. The current decline in the diesel price by about Nu 2 has been decreased from the source itself. As of the decrease of about Nu 2.5, it was the result of the government negotiating with the Indian oil distributors.”
The only option the government seems to have right now is either subsidizing the fuel or doing away with the green and sales tax. Other than these two alternatives, there is nothing much the government can do, said the PM.
“As per the investigations of the experts, there are some countries where the diesel price per liter is only Nu 60-70 or even Nu 25, but in our case the diesel price is about Nu 80-100, and in India the price differs in different regions, as each region has their own regulations and powers (which is why in some regions of India the price also ranges around 90-100 rupees per liter). As per our findings, the nations that usually sell the fuel at Nu 60-75, their economic situation seems to be quite bad, some even to the point beyond recovery,” said PM.
On the other hand, those selling fuel at more than Nu 100, their economic situation seems to be quite stable and their government has not subsidized the fuel price.
“When I say the economic situation of the nation seems quite stable, subsidizing too much is not the solution, instead we must focus on building a strong foundation. If we want to make the people happy, sure we can opt to subsidize the fuel to the same price as before (around Nu 70 per liter) but in the long run, and in order to improve the GDP, that option has its own drawback. People may think the past governments have done nothing or invented no new policies to improve the GDP but that’s not the case. The GDP is the accumulation of all the past occurrences. If we are to look at the import quality, most of the import is on food items. If we look at the export quality, aside from the hydropower , the export is mainly boulders and minerals. For one, there is a trade deficit, secondly, the import and export quality is quite sad compared to the other nations,” PM added.
PM said there is a need for diverse quality of the businesses or trade in the 21st century, like microchip department, digital line of shops, telecommunication technology, but such items are quite difficult to produce in Bhutan.
“That’s why we are asking the people whether they want temporary happiness with fuel subsidy or long- term economic stability of the nation so that people are able to earn revenue to the point that even if the fuel price escalates, they can afford to pay them. It is not something that has a concrete answer at the moment, but the government is in talks with the Government of India,” he said.
Last year the inflation was 7.5 percent and this year the inflation is 7.4 percent. PM said after lifting the COVID-19 restrictions, and after business returned to normal, even if there are some minor inconveniences, the situation returning to the same as pre-pandemic times is due to the grace of His Majesty as well as the soenam of the Bhutanese people. PM added that we have to think about the future of the nation and bear with some of the difficulties for now.
