Fuel price dives

The Gov­ern­ment of In­dia has ex­empted the levy of ex­cise duty on petrol and diesel

Business Bhutan - - Front Page - Lucky Wangmo

From to­day, re­tail prices for petrol will de­crease by Nu 10.29 a liter while the price of diesel will de­crease by Nu 7.75. The gov­ern­ment yes­ter­day an­nounced that the price of petrol and diesel will be re­duced by about 17% and 14% re­spec­tively. Al­though all ex­ports to Bhutan from In­dia have be­come zero-rated with the in­tro­duc­tion of the Goods and Ser­vice Tax by the Gov­ern­ment of In­dia (GoI) since July 1, 2017, the ex­cise duty for petrol and diesel was levied and re­funded to Bhutan. How­ever, now the GoI has ex­empted the

levy of ex­cise duty on petrol and diesel. Ac­cord­ing to a press re­lease from the Prime Min­is­ter’s of­fice, the drop in the fuel prices will stim­u­late the econ­omy by low­er­ing the cost of trans­porta­tion that will re­sult in a drop in prices for con­sumer and in­dus­trial goods across the board. “This will also en­hance our com­pet­i­tive­ness and pro­duc­tiv­ity and will be a ma­jor stim­u­lant to fur­ther sup­port­ing the strong eco­nomic growth that our coun­try is en­joy­ing,” states the press re­lease. The gov­ern­ment has also urged all busi­nesses to pro­vide equiv­a­lent re­duc­tions in the prices of goods and ser­vices be­ing pro­vided to cit­i­zens. “The re­duc­tion in fuel prices is ex­pected to de­crease the Con­sumer Price In­dex by ap­prox­i­mately 0.74 per­cent. The Royal Gov­ern­ment has in­structed the rel­e­vant sec­tors agen­cies to en­sure that low­er­ing of fuel price has de­sired ef­fect across all sec­tors of the econ­omy,” states the press re­lease. The gov­ern­ment has said it will re­view and as­sess whether the ben­e­fits of re­duc­tion in price have been passed on to the cit­i­zens and its im­pact on the econ­omy after six months. Based on the re­view, ad­di­tional mea­sures will be taken if re­quired. How­ever, with the re­duc­tion in fuel prices, the gov­ern­ment is ex­pected to forego huge rev­enue. This is be­cause with the ex­emp­tion of ex­cise duty on petrol and diesel, the gov­ern­ment will also not get the ex­cise duty re­fund from In­dia in­clud­ing the de­creased level of sales tax and green tax. “De­spite the sig­nif­i­cant loss of rev­enue to the na­tional ex­che­quer, the Royal Gov­ern­ment has de­cided to pass on the full ben­e­fits of the ex­cise ex­emp­tion to the gen­eral public of Bhutan with­out im­pos­ing any ad­di­tional taxes,” states a press re­lease. Ac­cord­ing to the gov­ern­ment, the na­tional ex­che­quer will be fore­go­ing rev­enues of Nu 1.514bn in ex­cise duty re­fund and Nu 94mn in sales tax and green tax. “To mark the aus­pi­cious day and honor His Majesty the Fourth Druk Gyalpo, the re­vised fuel prices shall come into ef­fect from 11:11 AM, Novem­ber 11, 2017,” states the press re­lease.

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