PDP calls on govt. to stabilize rising fuel prices

PDP’s third recommendation is to institute a fuel price stabilization measure immediately

Through a press release issued yesterday, the People’s Democratic Party (PDP) has called on the government to stabilize the rising fuel price in the country by giving five major recommendations.

PDP’s first recommendation is that the government should explore the Bhutan Economic Stabilization Fund to further mitigate the price rise.

According to the PDP, the Bhutan Economic Stabilization Fund was instituted in 2017 with the objective to ensure macroeconomic stability with a capital injection of Nu 100mn. The stabilization fund is to ensure a steady level of government revenue in the face of major commodity price fluctuations. Out of the 15% of the earnings of the hydro projects paid as annual royalty to the government, 5% goes into the stabilization fund.

“The amount which would have been increased is a fund source the government should explore to further mitigate the price rise,” recommends the PDP.

And from the MHPA alone generating an annual royalty of about Nu 1.6bn at the disposal of the government and out of which 5% is directly deposited into the stabilization fund, PDP states that this is a significant source of funds that should be utilized to mitigate the adverse impact of the rise in fuel prices.

PDP’s third recommendation is to institute a fuel price stabilization measure immediately.

“The measure should incorporate waiving of the 5% green tax, the 5% sales tax and surcharges levied presently. This should bring down the fuel cost significantly,” states the press release.

Fourthly, PDP recommends the government to ensure that 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.

Eventually, according to the PDP, the government must review the impact of the fuel price stabilization measure after a month and incorporate modifications as warranted by the changing circumstances.

“In the economic ravages caused by the COVID pandemic, we are witnessing the highest fuel price rise ever in our country. The rise of Nu 10 and Nu 17 per liters of petrol and diesel have caused panic amongst the general population,” states the PDP’s press release.

“This unprecedented fuel price rise will further spur inflation across all goods and services adversely impacting our economy which has already been damaged significantly. The lower-income people are the most at risk of being hurt by the fuel price rise.”

According to the PDP, 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. 

“Even as our economy has begun to see a small light of recovery with the commencement of COVID relaxations, the rise in fuel price will impede any recovery effort of the government,” states the party.

According to the PDP, the lower section of the population had been suffering, trying to make 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.