With the rise in fuel prices in the country yesterday, the People’s Democratic Party is recommending the government to use economic stabilisation fund and waive taxes on fuel. It is to help people, especially in the low-income bracket. The party said if not addressed, it will further spur inflation across all goods and services impacting the economy.
Today, the price of petrol is Nu 95 a litre in Thimphu. The diesel recorded a new high of Nu 100 a litre. The prices of petrol and diesel increased by Nu 10 and Nu 17 respectively.
The People’s Democratic Party recommended using an economic stabilisation fund instituted in 2017 with an initial deposit of Nu 100 M. The fund is to ensure a steady level of government revenue in the face of major commodity price fluctuations.
Out of the 15 per cent of the earnings of the hydro projects paid as annual royalty to the government, five per cent goes into the fund.
“The government can use this stabilisation fund to subsidise the cost of fuel so that if they decide that Nu 100 per litre is too high, the government could decide, let’s fix the price at 75 and whatever the actual cost that our distributor incurs will be subsidised by the government,” said Lekey Dorji, former economic affairs minister, PDP.
The measure also includes temporarily doing away with ten per cent tax, green and sales tax, and surcharges which will bring down the fuel cost significantly. The economic affairs minister said they are anticipating the price to fall.
“What we are going to see is from global and our dealers in India, we will try to get some facts and figures of what they are expecting. Are they expecting a more spike than this, a little lower than this and what could be the lowest one possible? Then we will submit the measures accordingly as immediate as possible,” said Economic Affairs Minister, Loknath Sharma.
The minister said measures such as waiving taxes is more doable than using the fund as the fund is still limited with just more than Nu 700 M.
Samten Dolkar
