The president of the National Association of Fuel Retailers (Anadegas), Juan Matos, although he considered the government’s decision to subsidize fuel prices correct and intelligent, understands that if the upward trend in the cost of oil continues, President Luis Abinader would have no other alternative than to eliminate it in whole or in part. .
He recalled that said subsidy established since last year with the objective of mitigating the cost of fuel in the national market, as a consequence of the increase in the price of a barrel of oil, cost to the State, to date more than 15 billion pesos.
The main leader of Anadegas also highlighted that President Abinader has been very correct and intelligent in extending this subsidy to the present year, despite the enormous burden that it represents for the national budget, but that it has contributed to consumers not feeling the true rises registered in the cost of fuels.
He considered that, with this measure, which he insisted was very wise and intelligent, President Abinader has demonstrated his good intentions and decision to seek alternatives of solution to the problems that affect consumers.
“With that and other intelligent and wise decisions, the president shows that he listens to the hearts of Dominicans, and demonstrates his intention to handle things in the best possible way,” said the unionist.
However, Matos warns that, if a barrel of oil exceeds the barrier of 115 dollars, the government would have to eliminate or reduce the volume of the subsidy, as established at the time it was established.
“So we understand, that in Anadegas we understand that if this occurs, this measure would not be possible because the amount of resources that the government has been allocating is very large, burdensome for the treasury,” he emphasized.
It is recalled that, when providing the fuel subsidy, it was established that it would be assumed by the government when the oil barrier kept the price between 85 and 115 dollars.
Until now, the president of Anadegas highlighted that the fuel prices have not changed in recent weeks, and that he hopes that it will continue or that the trend will be downward.
The president of the entity that brings together fuel retailers, highlighted as an important initiative with a view to stabilizing prices in the international market, the million barrel of oil released from the United States federal reserve.
“USA is taking a series of measures, including the release of a percentage of its federal reserve, which has mitigated the situation, in addition to the confidence that the war between Russia and Ukraine will be resolved soon, “he said.
The president of Anadegas referred to the negative impact that it has had for the membership of that entity, the rises registered in the price of fuels, which has contributed to a considerable reduction in the volume of sales.
“The sector is going through a very difficult situation as a result of the reduction in sales levels, added to the fact that margins have remained frizzy for the last eight years, added to the closure period for months of the main productive activities, as a consequence from Covid-19 pandemic”, he referred.
In previous statements regarding the problem, the president of Anadegas warned that, if fuels rise exorbitantly, not only would there be more inflation in the country, but the sales of the stations, which they have said have been reduced quite due to the pandemic, they would be further reduced.
He also recalled that President Luis Abinader maintained total and partial subsidies on fuel prices during the last 11 months, which generated a historical debt with importers for more than RD$13 billion in 2021 alone, in addition to this. , the previous management had left RD$2,400 million in pending payments, totaling the figure of RD$15,360 million, an amount that has been paid 100% during this month, informed the Ministry of Industry, Commerce and Mipymes.
In a context of economic crisis derived from the COVID-19 pandemic that impacted the international price of hydrocarbons, particularly oil derivatives in all world economies, the Dominican government allocated around RD$13 billion to subsidize fuels and avoid transfer the increases to citizens, with 2021 being the year with the highest fuel subsidies.
Economists and businessmen, although they have valued the government’s decision to maintain the fuel price subsidy, have warned that it would be unsustainable for a long time due to how onerous it would be for the State.
They have also highlighted that the effects of Russian invasion of Ukraine they have been affecting the country through the loss of purchasing power of families and the productivity of companies due to the increase in the price of raw materials, especially oil.
One of those who have spoken in this regard is the economist and businessman Fabricio Gámez Mazara, who noted that any increase above 115 dollars per barrel of oil would be transferred to domestic prices, excluding the ad/value tax on oil prices. fuels.
He also stated that the subsidies will only be able to moderate, temporarily, the effect that the increase in the price of fuels has on the productivity of companies and the purchasing power of families.
