Prices of petrol and diesel drop

Bhutan Times - - Front Page - Pema Yang­zom

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.

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