PDP offers solutions to bring down fuel prices

In a press release the People’s Democratic Party listed out how higher fuel prices would hurt the economy and it gave some recommendations on how fuel prices can be decreased.

The PDP said in the economic ravages caused by the COVID pandemic, Bhutan is witnessing the highest fuel price rise ever in our country.

It said the rise of Nu. 10 and Nu. 17 per liters of petrol and diesel have caused panic amongst the general population.

“This unprecedented fuel price rise will further spur inflation across all goods and services adversely impact our economy which has already been damaged significantly. The lower-income people are the most at risk of being hurt by the fuel price rise,” said the party.

It said in view of the above PDP calls to the attention of the government on the three impacts of the fuel hike.

First, the transportation sector which is being impacted immediately will cause inflation to spiral. The rise in the cost of goods and services will greatly impact the livelihood of the people, especially the lower-income section.

Second, even as the economy has begun to see a small light of recovery with the commencement of COVID relaxations, the rise in fuel price will impede any recovery effort of the government.

Third, the lower section of the population had been suffering, trying to make ends meet ever since the pandemic began. The inflation in food prices has caused much distress. The rise in fuel price will further exacerbate the distressful high food cost to the lower-income section of the population.

The PDP recommended five measures to bring down the fuel prices.

It said the Bhutan Economic stabilisation fund was instituted in 2017 with the objective to ensure macroeconomic stability with a capital injection of Nu. 100 million. The amount which would have been increased is a fund source the government should explore to further mitigate the price rise. PDP said the stabilisation fund is to ensure a steady level of government revenue in the face of major commodity price fluctuations.

Out of the 15% of the earnings of the Hydro Projects paid as annual royalty to the government, 5% goes into the Stabilisation fund.

From MHPA alone an annual royalty of about Nu. 1.6 billion is at the disposal of the government out of which 5% is directly deposited into the stabilisation fund. It said this is a significant source of funds that should be utilised to mitigate the adverse impact of the rise in fuel prices.

PDP called on instituting a fuel price stabilisation measure immediately. The measure should incorporate waiving of the 5% green tax, the 5% sales tax and surcharges levied presently. This, it said, should bring down the fuel cost significantly.

It asked to ensure that the benefits of tax waivers are cascaded down to the general public. Strengthen vigilance to strictly monitor unhealthy inflationary practices in the shops and transport sectors.

The party said a review should be done on the impact of the fuel price stabilisation measure after a month and modifications should be incorporated as warranted by the changing circumstances.

PDP said as a responsible political party it is duty-bound to offer alternate ideas and views and uphold the democratic instrument of check and balance whenever required.

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