People’s Democratic Party (PDP) yesterday issued a press release, calling on the government to stabilise the rising fuel price.
The party stated that the economic ravages caused by the Covid-19 pandemic has witnessed the highest fuel price rise in the country.
The rise of Nu 10 and Nu 17 per litre of petrol and diesel, respectively, has caused panic amongst the general population, it added.
“The rise in cost of goods and services will greatly impact the livelihood of the people, especially the lower-income section,” it stated, adding that the transportation sector, which is being impacted immediately, will cause inflation to spiral.
It also stated that the rise in fuel price will further exacerbate the high food cost to the lower-income those who are already suffering, trying to make ends meet ever since the pandemic began.
The fuel price will also impede the economic recovery effort of the government where it has begun to see a small light of recovery with the commencement of Covid-19 relaxation, the party started.
And the party recommended the government to explore and utilise the Bhutan Economic Stabilisation Fund (BESF) to mitigate the adverse impact of the rise in fuel prices.
“The stabilisation fund is to ensure a steady level of government revenue in the face of major commodity price fluctuations,” the press release stated.
The BESF was instituted in 2017 with the objective to ensure macroeconomic stability with a capital injection of Nu 100 million (M).
Out of the 15 percent of the earnings of the hydro projects paid as annual royalty to the government, 5 percent goes into the BESF.
“From Mangdechhu hydro-project authority alone, an annual royalty of about Nu 1.6 billion is at the disposal of the government out of which 5 percent is directly deposited into the BESF,” the party stated, adding that it could be a significant fund source.
The party also recommended to institute a fuel price stabilisation measure immediately to bring down the fuel cost. “The measure should incorporate waiving of the 5 percent green tax, the 5 percent sales tax and surcharges levied presently.”
Also, the PDP recommended the government to ensure the benefits of tax waivers are cascaded down to the general public and strengthen vigilance to strictly monitor unhealthy inflationary practices in the shops and transport sectors.
The government could also review the impact of the fuel price stabilisation measure after a month and incorporate modifications as warranted by the changing circumstances, it added.
While the economic affairs minister, Loknath Sharma, said that the BESF is still a building amount and that could be around 700M. “Instead of utilising BESF, other measures like doing away with taxes and surcharges are to be explored.”
“If the fuel prices are going to remain high for a while, measures to stabilise are must and we are working on measures that could be doable,” Lyonpo said.
He added that PDP’s suggestions are appropriate as well, but there are not many tools in the petroleum, oil and lubricants sectors to play with.
PDP also stated that as a responsible political party, the party is duty-bound to offer alternate ideas and views and uphold the democratic instrument of check and balance whenever required.