STAFF REPORTER | Thimphu
With a rise of Nu 10 for a litre for petrol and Nu 17 for diesel, the country is currently witnessing the highest fuel price surge in recent memory.
A press release issued by the People’s Democratic Party (PDP) states that this unprecedented fuel price rise will further spur inflation across all goods and services hurting our economy which has already been damaged significantly.
It further added that the lower-income people will be the most at risk of being hurt by this fuel price rise.
“Therefore, the PDP calls to the attention of the government on 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,” it stated.
Further, PDP said while the country’s economy has seen a small light of recovery with the commencement of Covid-19 relaxations, the rise in fuel prices will impede any recovery effort of the government.
PDP said the lower rung of the population have been suffering and trying to make their 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 press release said the PDP recommends the government for immediate action to stabilize the issue of rising fuel prices.
It recommends that the Bhutan Economic stabilization 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 could be a source the government should explore to further mitigate the price rise.
PDP said the stabilization fund is to ensure a steady level of government revenue in the face of major commodity price fluctuations. “Out of the 15 percent of the earnings of the hydro projects paid as annual royalty to the government, five percent goes into the stabilization fund,” it said.
The PDP further recommended that from Mangduechhu Hydroelectric Project Authority (MHPA) alone an annual royalty of about Nu 1.6-billion is at the disposal of the government out of which five percent is directly deposited into the stabilization fund.
It said this is a significant source of funds that should be utilized to mitigate the adverse impact of the rise in fuel prices and also institute a fuel price stabilization measure at the earliest.
“The measures should incorporate waiving the five percent green tax, the five percent sales tax, and surcharges levied at present. This should bring down the fuel cost significantly,” PDP said.
PDP also recommended the government to ensure that the benefits of tax waivers are cascaded down to the general public.
“The government should strengthen vigilance to strictly monitor unhealthy inflationary practices in the shops and transport sectors. It should also review the impact of the fuel price stabilization measures after a month and incorporate modifications as warranted by the changing circumstances,” it said.
Meanwhile, PDP said that as a responsible political party they are duty-bound to offer alternate ideas and views and uphold the democratic instrument of check and balance whenever required.