Bhutan: Economic affairs ministry proposes options to reduce fuel price


The Ministry of Economic Affairs (MoEA) has proposed numerous interventions to the Cabinet to reduce fuel prices.

Cabinet Secretary Sangay Duba said that they have received the proposal from the ministry and it will be discussed in the Cabinet in the coming weeks.

Economic Affairs Minister Loknath Sharma said that there are only two options for the intervention and measures on the spike in the fuel prices that the government could do.

Lyonpo said that the government could either waive the taxes or give subsidies to the people.

The fuel prices include five percent green tax and five percent sales tax. “The proposal is submitted to the cabinet,” Lyonpo said. The People’s Democratic Party (PDP) also recommended the government instituting a fuel price stabilisation measure like waiving the five percent green tax, the five percent sales tax and surcharges levied presently.

Lyonpo said that the hike in fuel price will have an impact on the economy and the government is looking into minimising that impact.

The price of diesel is Nu 100.59 a litre and the price of petrol is Nu 95.21 a litre in Lungtenzampa, Thimphu. The price of petrol increased by Nu 10 and the price of diesel increased by Nu 17 a litre from March 16.

“The immediate measure was lifting of the switching of the driver system. The ministry has requested to lift the switching of drivers which will decrease the transportation cost,” Lyonpo said.

Lyonpo said that it was likely for the fuel prices to increase further. However, in the next few months if the fuel price decreases it will be very difficult to come down to Nu 70- Nu 80 per litre at the normal situation.

Meanwhile, the government is also looking into waiving the electricity bills for the months during which a lockdown was enforced.

Lyonpo said that they have to weigh the two waivers, waiving electricity bills or the fuel price.

“We have to see which one will have a greater impact on the economy and the consumers,” Lyonpo said.

However, Lyonpo said that it was not likely that the government can waive the electricity bills.

So far Bhutan Power Corporation (BPC) has been providing subsidies to the rural areas, in the quarantine facilities and at the points of entry. “If we again waive the electricity bills, the revenue will decrease,” Lyonpo said.

The government has collected data on electricity consumption in urban areas during the winter months in 10 affected dzongkhags. In total, the electricity bill comes to around Nu 135M.