Prices of petrol and diesel drop
On the very auspicious day and in commemoration of 62nd birth anniversary of His Majesty The Fourth Druk Gyalpo, the government has announced the price reduction on petrol and diesel from yesterday.
Good and service tax ( GST) was introduced by the Government of India in 1st July this year, all the exports from India to Bhutan have become zero rated, except for the petrol and diesel. However, recently, the Government of India also exempted the levy of excise duty on petrol and diesel.
The press release from the office of the Prime Minister states that the exemption of excise duty will have an impact on the national revenue with the remov- al of excise duty refund ( EDR) and reduce level of sales tax ( ST) and green tax ( GT) collection.
The press release stated that, the government will have to forego the revenue of Nu. 1.514B in EDR, and about Nu.94M in ST and GT collection.
Despite the significant loss of revenue to the national exchequer, the government has decided to pass on the full benefits of the excise exemption to the general public without imposing any additional taxes, states the press release.
Besides the import of other goods and services, fuel imports from India are a major import item that accounts for Nu. 7.369B in 2016. The exemption at the source of excise duty on fuel imports will reduce on an average price of the petrol by Nu. 10.29 per litre and diesel by Nu. 7.75 per litre, a reduction of about 17 percent and 14 percent respectively.
The reduction in the fuel price is expected to decrease the consumer price index ( CPI) by approximately 0.74 percent. However, the foreign minister and officiating prime minister, Lyonpo Damcho Dorji said during the press conference last Friday, the government will review and assess whether it benefit of reduction of price has been passed to general public after six months.
The government has also instructed the relevant sector agencies to ensure that lowering of fuel price has desired effect across all sectors of the economy, added the minister.
The drop in the price of fuel will stimulate the economy by lowering the cost of transportation that will result in a drop in the prices of consumer and industrial goods across board, said the Lyonpo.
The minister for information and communications, Lyonpo D N Dhungyel said that, the reduction of fuel price will gear up the economic development in a country and specifically the transport sector is going to be benefited the most. When benefit comes to transport sector, it directly goes to the people. As today, most of the common people uses transport like buses and taxis for a movement and they will be benefited the most.
The press release states that, the petrol and diesel are the main drivers of the economy; a reduction of their prices constitutes the biggest economic stimulus ever provided by the government. With the reduction in fuel prices, it expected to bring our economy growth by 0.18 percent within a year.
However, the press release states that in the long run, the tax base is expected to expand increasing tax revenue to the government.
Meanwhile, the price for petrol in western region will be dropped to Nu. 54.11 per litre and Nu. 50.63 per litre for diesel, for central region, the price for petrol will be dropped to Nu. 49.70 per litre and for diesel, the price will dropped to Nu. 47.13 on an average.
While, in eastern region, the price for petrol will be dropped to Nu. 50.06 per litre and for diesel, it will be dropped to Nu. 47.54 per litre on an average.
Officiating prime minister, Lyonpo Damcho Dorji said that the government will review and assess whether it benefit of reduction of price has been passed to general public after six months during the press conference last Friday.