In order to face the economic crisis generated in the country by the war between russia and ukrainethe President of the Republic, Luis Abinader, had to announce a series of measures on March 7, 2022, including subsidizing the prices of fuels to prevent real prices from reaching consumers.
The fuel subsidy was arranged with the parameter that, while the price of West Texas Index (WTI) is above 85 dollars per barrel and below 115 dollars, the Government will maintain the internal prices of hydrocarbons unchanged at the level of March 4, 2022.
At that time he noticed that any price movement above $115 per barrel will be transferred to domestic prices, without the inclusion of the tax ad valorem in calculating these prices.
At that time, President Abinader indicated that with this measure, which would have an initial duration of four months, the Government would continue to assume a permanent minimum fiscal sacrifice of at least between 600 and 1,000 million pesos weekly, which would represent approximately 2,400 and 4,000 million pesos per month or, what is the same, between some 9,600 and 16,000 million pesos during its four months of application.
However, from March to date, the Dominican government has allocated more than 22.3 billion pesos in subsidies to contain the price of all fuels.
On June 10, 2022, Vice Minister of Internal Trade, Ramón Pérez Fermín, reported in his speech to announce the prices of fuelsthat until that date the government had allocated more than 18,968 million pesos in subsidies.
A week later, on June 18, he announced that the Government had decided to contain 100 percent of the increases in the prices of fuelsat a cost of 1,765 million pesos, thus preventing citizens from being hit by a severe global crisis.
This June 24, Vice Minister of Internal Trade, Ramón Pérez Fermín, announced once again that the Government decided to maintain the extraordinary subsidy for hydrocarbons with more than 1,631 million pesos, to avoid dramatic increases in the local market.
The international crisis has caused rises in the prices of fuels in countries like the United States, that last Thursday the Government of that country met with the seven largest oil companies in the United States, whom President Joe Biden urged to increase production to lower gasoline prices that are at maximum historical, although no concrete agreements were reached.
According to reports published by the EFE Agency, the association of producers of fuel and petrochemical products of the United States (AFPM) said in a statement that the price increase is the result of a series of “complex causes”, such as the war in Ukraine and the economic stoppage of the pandemic, which reduced the demand for Petroleum.
However, he assured that the oil companies are willing to work with the political class to advance the economic recovery and safeguard the national security of the United States.
