FOLLOW THE GALLON: GUATEMALA HAS MOVED, WHAT OPTIONS BELIZE HAVE?

THE GOVERNMENT LEVER

SPECIAL INVESTIGATION

Belize City: Wednesday 23rd September 2026:  A gallon of fuel does not arrive at the pump with its final price already written by the international petroleum market.

• There is the landed cost.
• There are commercial margins.
• And there is government taxation.

Belize's own Ministry of Finance fuel-price worksheets establish that distinction.

• That means that when world petroleum prices rise, governments are not necessarily powerless spectators. They face policy choices about how much of the shock reaches motorists immediately, how much government revenue can temporarily absorb, and what fiscal consequences follow from intervening.

This week, neighboring Guatemala made one such choice.

1. Its Congress approved a temporary exemption from two taxes on covered fuels—the petroleum-distribution tax known as IDP and Value Added Tax—through December 31, 2026.
2. Guatemala estimates that the measure could reduce the tax component by as much as Q9.41 per gallon of premium gasoline, Q9.10 for regular gasoline and Q6.34 for diesel and gas oil.
3. Guatemala is not making fuel cheaper by changing the world price of petroleum.
4. It is changing what government takes from the gallon.

That distinction deserves Belize's attention.

BELIZE ALREADY USES THE LEVER

The Government of Belize does not need Guatemala to demonstrate that taxation can be adjusted when petroleum costs move.

• Its own figures demonstrate it.

1. According to Ministry of Finance fuel-price composition data, on March 13, 2026, diesel carried a landed cost of approximately BZ$6.08 per gallon, commercial margins of approximately BZ$1.50 and government taxes of approximately BZ$4.48, producing a pump price of BZ$12.05 in Belize City.

• By March 25, the landed cost had risen dramatically to approximately BZ$9.14.
• Commercial margins stood at approximately BZ$1.73.
• Government taxes had fallen to approximately BZ$3.68.
• The resulting pump price was BZ$14.55.

Those numbers establish something important.

• Government taxation is not an immovable number.

It already, moves.

• The question therefore is no longer whether Belize possesses a fiscal lever.

It does.

• The legitimate public-policy question is how far that lever can responsibly be moved—and under what circumstances.

GUATEMALA HAS NOW MOVED IT MUCH FURTHER

Guatemala faced rapidly increasing fuel prices and considered several responses.

1. It considered price stabilization.
2. It considered subsidies.
3. It considered partial tax reductions.

Then, following political negotiations and public pressure, its Congress approved the temporary exemption of the IDP and VAT on specified fuels.

This is not free money.

• Guatemala estimates that government will surrender approximately Q3.3 billion in revenue during the exemption.
• That money normally finances government.
• Therefore, Guatemala's decision creates another problem: the State must absorb the lost revenue through fiscal adjustments, other revenues or reduced expenditure somewhere else.

National Perspective Belize is therefore not suggesting that Belize blindly copy Guatemala.

• That would substitute one simplistic argument for another.
• We are asking something more serious.

HAS BELIZE EXAMINED ITS OPTIONS?

If international petroleum prices remain elevated, what mechanisms has the Government of Belize modelled to protect households and businesses?

• Could taxation be temporarily adjusted further?
• Could one component be reduced without removing all fuel taxes?
• Could a temporary trigger mechanism automatically reduce particular taxes when landed petroleum costs cross an extraordinary threshold—and restore them when prices fall?

What would each option cost government?

• How much would each save motorists?
• And what public expenditure would have to be protected if government revenue declined?

Those are questions capable of being answered with numbers.

SHOW BELIZE THE NUMBERS

This is where transparency becomes essential.

Government should be able to tell Belizeans:

• If BZ$0.25 per gallon were temporarily removed from a particular tax component, the estimated revenue consequence would be X.
• If BZ$0.50 were removed, it would be Y.
• If BZ$1.00 were removed, it would be Z.

And the corresponding estimated savings to consumers could likewise be calculated.

• Then Belizeans could see the trade-off.

That is far more useful than reducing this issue to: 

• “Government must cut taxes.”

or

• “Government cannot afford to cut taxes.”

Neither statement tells the country enough.

Show us the modelling.

AND THERE IS ANOTHER QUESTION

1. Fuel is not merely another consumer product.
2. Diesel moves buses.
3. Diesel moves trucks.
4. Fuel moves agricultural machinery.
5. Fuel moves fishermen.
6. Fuel moves construction equipment.
7. Fuel helps move virtually everything that eventually arrives on a supermarket shelf.

Consequently, an extraordinary fuel-price shock does not remain at the service station.

It travels.

FOLLOW THE GALLON and eventually you may find it inside the price of food, transportation, construction and doing business.

• That is why Guatemala described its intervention as an emergency measure.
• Whether Belize faces circumstances requiring a comparable response is for Belizean policymakers to determine and publicly justify.

But the events next door make one question increasingly difficult to avoid:

WHAT IS BELIZE'S PLAN?

• Not Guatemala's plan.
• Not Mexico's plan.
• Belize's.

1. If landed fuel costs continue rising, at what point does government intervene?
2. What indicators would trigger intervention?
3. Which tax instruments could be adjusted?
4. How much revenue could Belize temporarily surrender without threatening essential services or fiscal stability?
5. What mechanisms would ensure that any reduction actually reaches motorists instead of being captured elsewhere in the supply chain?
6. And when would the intervention end?

WE ARE NOT ASKING FOR A GIVEAWAY

There is an important distinction.

• A permanent reduction in government revenue is one thing.
• A temporary emergency mechanism activated during an extraordinary external petroleum shock is another.

Guatemala has chosen the latter.

• Its exemption expires on December 31.

Belize could examine that experience without adopting the same policy.

• It could study whether Guatemala's projected reductions actually reach consumers.
• It could examine the fiscal consequences.
• It could observe whether inflationary pressure eases.
• And it could determine whether another model would better suit Belize.

That is what prudent government should do when a neighboring country conducts, in effect, a real-world policy experiment.

Watch. Measure. Calculate. Prepare.

FOLLOW THE GALLON NOW GOES TO BELMOPAN

National Perspective Belize therefore places several questions before the Ministry of Finance and the Government of Belize:

1. What portion of every current gallon represents government revenue?
2. How much fuel-tax revenue is government presently collecting monthly?
3. Has the Ministry modelled temporary tax reductions under different international petroleum-price scenarios?
4. What would a 25-cent, 50-cent or one-dollar temporary reduction cost the Treasury?
5. What would be the estimated effect on motorists and transportation costs?
6. Does Belize have a predetermined fuel-price threshold at which additional fiscal intervention would be considered?
7. And if no such mechanism exists, should one now be designed?

• Those questions do not prescribe the answer.
• They demand that the options be examined.

THE BORDER HAS GIVEN BELIZE A LABORATORY

For the next several months, something unusual may occur.

• Two neighboring countries exposed to the same turbulent international petroleum market will be using different fiscal approaches.
• Belize will continue operating its fuel-pricing architecture.
• Guatemala will temporarily remove substantial taxes from its gallon.

That gives us an opportunity.

National Perspective Belize intends to FOLLOW BOTH GALLONS.

• We will watch Guatemala's pump price.
• We will watch Belize's pump price.
• We will follow landed costs.
• We will follow taxation.
• We will follow commercial margins.
• And, importantly, we will follow what happens to government revenue and consumer prices.

Because eventually the numbers should permit a comparison far more revealing than asking: Which country has cheaper gasoline?

The real question will be:

WHEN THE SAME GLOBAL ENERGY SHOCK REACHED TWO NEIGHBOURING COUNTRIES, HOW DID EACH GOVERNMENT DISTRIBUTE THE BURDEN?

• That chapter cannot yet be written.
• The experiment has only just begun.

But from today forward—

• we are following both gallons.

By: Omar Silva – Editorial Director @ www.nationalperspectivebz.com

NATIONAL PERSPECTIVE BELIZE —