The retail pump price of fuel will remain at Le.3,750 per litre and the price will not be reduced because of the depreciation of the Leone to the Dollar, Dr. Kaifala Marah, Minister of Finance and Economic Development said last Thursday in the well of parliament before the Finance Act 2016 was enacted by lawmakers.
He re-echoed the statement the Petroleum Regulatory Agency (PRA) had made in a press release few weeks ago that Government spent Le.150bn on petroleum subsidy last year.
The Finance Minister stressed the country’s retail pump price is the cheapest compared to Guinea and Liberia, and that is why petroleum products are smuggled to these countries.
Civil Society Organisations issued a press release over a week ago and gave government a 14 days ultimatum to reduce the retail pump price of Le.3,750 or they will go on strike. Civil society issued the ultimatum when the cost of crude oil per barrel fell below $30. The current price of crude oil has increased and stands around $40. This increase in oil price will likely affect the commercial pump price but will not affect the retail pump price because it is subsidized.
The newly enacted Finance Act of 2016 has incorporated the 5 percent increase in Pay As You Earn (PAYE) tax making PAYE 35 percent of income for all those earning monthly salary above Le.2m. The Act also gives tax concession for the promotion of women to managerial positions in institutions.
Lawmakers contributing before the bill was enacted said it will contribute to revenue mobilization to fund the spending stipulated in the budget. If given the presidential assent, the Finance Act of 2016 will replace the Finance Act of 2011.