As Fuel Prices Increase On World market: Will NTGL Reduce Taxes Or Accept Increase?
By: I. Solo Kelgbeh
Posted June 3, 2004
The mounting increase in the price of petroleum products on the world market is gradually affecting the Liberian market. With the sharp increase in price on the global market, importers are said be to losing and could forgo the importation of the products into the country unless the government of Liberia act swiftly and appropriately.
Already, some importers are unwilling to bring in the commodity because of losses they continue to incur because of the increase on the world market.
In recent time, prices of petroleum products have rocketed unceasingly. The hick in price was worsened recently following the seizure of oil company in Saudi Arabia.
Except for Liberia, most countries in the world including USA, Great Britain and other West African countries have increased the retailed prices of the petroleum products.
According to a survey conducted yesterday, most importers who preferred anonymity are contemplating not to bring in the products because they were losing and not prepare to operate at a loss.
The failure of the importers to abort the importation of petroleum products due to the rising increase of petroleum products on the world market is of paramount concern. Many believe that this could create an imminent shortage something that may lead uncontrollable rising price on the local scene.
Analysts yesterday suggested that the Government of Liberia needs to act swift if the essential commodity must remain on the market.
Since the increase of the product on the world market, the cost for the importation of a gallon of gasoline is US$1.614. This excludes GOL’s import levy and sales tax of US$0.45 in addition to LPRC’s charges of US$0.20 for handling & storage and Rehabilitation & Maintenance.
Other charges bring the cost of gasoline’s gallon to US$2.68. This means, if the pump price of a gallon is US$2.25, importers will suffer a lost of US$0.43 on gasoline. Prior to the increase, the total cost of a gallon of gas US$2.256, while the approved pump price was US$2.25 with a tax exemption of US$1.61.
As for fuel generally known as gas oil, the cost for the importation of a gallon is US$2.43,while the approved price in Liberia is US$2.20 making a deficit of US$0.23.
Prior to the recent rocketing price, the total cost of a gallon was US$2.196, while the approved price was US$2.20 with a tax exemption of US$1.61.
Meanwhile, it has been gathered that the situation is of serious concern to the LPRC management. Up to yesterday, some importers were still mounting pressure on the LPRC to see what can be done to ensure constant supply of the products.
Accordingly, sources said that the LPRC management will meet importers today. The meeting will be attended by Mr. Wesley Johnson Vice Chairman of the Transitional Government.
Another source said that the Liberian Government cannot afford anything that will add more hardship to the people. The source said it was for this reason the product was reduced in November last year.
Some experts are suggesting that both the government and importers must reach a compromise that will not be detrimental to either side. Some are of the view that government could forego some of its taxes to reduce losses being incurred by importers until the situation improves.
In a related development, concerns have been expressed over the failure of a Liberian business to import petroleum products in spite of assurance given the Liberian Government. Sources told this paper that LibAfric/Aminata had told the Liberian Government that it could import the products on the market on the current prices, but has failed to do so.
Accordingly, the LPRC management has informed the company about its failure to comply with the agreement and called con the company to fulfill its promise made several months ago to import the products to avoid imminent shortage.