An economic center warns against raising fuel prices within the 2023 budget

An economic center warns against raising fuel prices within the 2023 budget

2023-03-30 00:12

An economic center warns against raising fuel prices within the 2023 budgetShafaq News/ The Iraqi Political Economic Center warned, on Thursday, of the repercussions of imposing taxes and fees on the prices of gasoline, gas, and oil refinery products within the 2023 budget, noting that people with limited incomes will be the biggest losers if they take such a step.

The director of the center, Wissam Hammal Al-Helou, said in a statement today, “There are indications that the draft budget for 2023 includes a fee of 5% on the quantities of gasoline and kerosene sold to citizens, with the imposition of a 5% tax on the products of Iraqi refineries and 15% on the value of what is sold of imported derivatives.”

He added, “These taxes, through which it is intended to add 450 billion dinars to the state treasury, will add additional costs that burden the citizens, and will cause an economic downturn in the country that is paid for by the private sector due to the dependence of the majority of laboratories and factories on oil derivatives, not to mention the increase in transportation costs for citizens, especially those with income.” The limited number of people who depend on means of transportation in the private sector, such as minibuses (Kia) 11 and 14 passengers, or taxis inside and outside Baghdad and the provinces and those who travel between the provinces.

He continued, “As for private car owners, high prices will increase spending on fuel, and of course, the rise will affect all aspects of life due to the high transportation costs, as well as the high price of fuel sold to private generators.”

Al-Helou also pointed out that “Iraq consumes between 28-30 million liters per day of fuel, and a high amount of it is imported. Imposing a 15% rate on each liter consumed will mean a general rise in prices ranging between 15-20% of the current prices, to add a new burden on citizens who suffer.” Among the burdens of high prices due to the greed of some merchants with the advent of the month of Ramadan, as well as the high cost of foodstuffs caused by the Russian-Ukrainian war, which affected Iraq.

And he warned that “adding such price ratios to fuel will further complicate the economic situation, with fluctuations in the exchange rate and the government’s inability to control it, and the impact of this on the costs of production and imported materials, which clearly raised prices in the market, which reduced the value of the Iraqi dinar, which needs deliberate decisions to return to its recovery.” The former against the dollar.

Al-Hilu noted that “the government is invited to study its plans again and not be drawn into solutions that do not match the rentier Iraqi economy, in which spending on salaries provides liquidity in the market in light of the continuous inability to find a private sector capable of providing resources that provide additional income for citizens that increase their purchasing power as well as It enables the state to seek the help of a major partner that supports its economy.

And he stressed that “the government should consider, before issuing any decision, its repercussions on those with limited incomes, and not implement plans that target groups it considers to have high purchasing power, while previous experiences confirm that the poor citizen is the biggest loser.”