The Government has cut the excise tax on regular gasoline to $2.54 and has further reduced the excise for Diesel to $1.61, representing an almost 55% overall increase for the latter fuel product.
According to Minister of State in Ministry of Finance Hon. Christopher Coye, the suite of subsidies—including the excise-tax cuts for Diesel—has cost the public purse close to $5 million in forgone tax revenues over the last three months. For the months of April and May this year, the government gave up roughly $1.5 million and $2.9 million, respectively.
The first set of reductions for Diesel began in early March. The first reduction was gazetted on March 5th, when the excise tax was reduced to $3.10 per imperial gallon, down from the original rate of $3.57. The excise on Diesel Oil was later reduced to $2.34 as of March 12th. And as of the May 11th Gazette, the price was again reduced to $1.61 per imperial gallon.
The new Diesel-Oil-excise-rate of $1.61 reflects a $1.96 cut from where the rate had stood for the last five years.
Regular gasoline—the excise rate for which had stood at $3.95 since 2017—was reduced slightly to $3.75 as of April 7th and, once again, reduced to $2.54 as of May 20th this year.
In 2021, Belize imported close to 15.2 imperial gallons of regular gasoline. Consequently, if the present rate of $2.54 had been applied throughout last year, the excise revenue generated would have been closer to $39 million as opposed to the almost $60 million, a loss of close to $21 million.
Similarly, in 2021, Belize imported more than 18 million imperial gallons of Diesel Oil. Again, if the rate of $1.61 set in mid-May was applied throughout last year, the public purse would have been short of more than $30 million.
However, it is unclear if the government will maintain the present rates throughout the rest of 2022, as the policy appears to be per shipment and dependent on international prices.
The measures, nevertheless, are consistent with the Cabinet’s decision to provide measured relief. In an April 7th, briefing, GOB informed, “Cabinet approved numerous fuel price measures. … Cabinet has established a firm cap on diesel and regular gasoline pump prices per gallon.” The release added, “This cap will be supported through a fuel price stabilization fund to be established to be established by the government with the Central Bank of Belize.”