Local Private Sector bracing for rising global shipping costs due to Middle East crisis – Nicholas Boyer

As oil prices rise amid tensions in the Middle East, the impact is being felt by the global transport industry, and the local businesses are now bracing for being hit by that inflation.

This is according to the director of the Vreed-en-Hoop Shore Base Inc. (VEHSI), Nicholas Deygoo-Boyer, during an appearance on the Starting Point podcast. While the podcast will be published in full today, a snippet of the episode was shared online of the businessman and former Private Sector executive speaking about the impact of the ongoing war in the Gulf.

Deygoo-Boyer, who also serves as a director at his family’s company, National Hardware Guyana Limited, warned that while Guyana is better positioned to withstand the effects of the war as a result of key government measures, some external shocks could still be felt in the country.

“At our National Hardware businesses, we’ve already received heads-up notices from the shipping companies that costs will be going up for importing product. And again, this is not profiteering. This is passing costs on. So, you feel it for them, and nobody’s doing this with a smile on their face. They’re all very glum when they’re passing these messages on. But it’s the reality.”

“And for a lot of us, it’s a tough thing to deal with because especially if you have not had a large savings base, that inflation is going to hit you hard… For businesses, our issue is that a lot of us are expanding, which means we have taken on debt to fund new projects. So, it’s very hard to not pass on the inflation,” the businessman emphasised.

Rising tensions in the Middle East have placed renewed global focus on the Strait of Hormuz amid an escalating conflict involving Iran, Israel, and the United States. The ongoing military exchanges, including airstrikes on Iranian energy infrastructure and retaliatory attacks, have heightened fears of disruptions to one of the world’s most critical oil transit routes. As a result, global markets remain on edge, with concerns mounting over potential spikes in fuel prices, increased shipping costs, and wider impacts on international trade if instability in the region persists.

Since 2020, the Guyana Government had introduced a series of interventions to combat the surge in global shipping costs, including rolling back freight charges to pre-pandemic levels for calculating import duties, excise taxes, and VAT, a policy extended through 2025–2026 to relieve importers and, ultimately, consumers. Additionally, the government has maintained a zero per cent excise tax on gasoline and diesel since March 2022 to combat rising fuel costs, down from 50 per cent in 2020.

Permanent solution

Even with these interventions, Deygoo-Boyer, who previously served at the helm of several Private Sector bodies in Guyana, says that there needs to be a more permanent solution to offset the global shocks on the local economy.

“I think that it might be well worthwhile to reanalyse whether a refinery is feasible or a strategic reserve is feasible. I’m no expert in this field, but I think that what we took for granted as the world is how much of the product we’re demanding – diesel, petrol, jet fuel, et cetera – and how much that product is controlled by a small region and passing through that tiny area… And that has implications for the average person today because we’re likely to see quite a bit of inflation that is uncontrollable by the government,” Deygoo-Boyer stressed.

The businessman’s comments come just days after President Dr Irfaan Ali reignited discussions on a national refinery, emphasising that the strategic development of regional resources is essential to safeguarding the Western Hemisphere’s economic stability and energy security.