The Government assumed a cost not passed on to consumers of RD$1,354 million during this week by starting the application of the fuel subsidy scheme as part of the package of official measures to face price increases in basic consumption.
Despite this high subsidy, which only covered the immobility of the price of gasoline, diesel oil and liquefied petroleum gas, the Ministry of Industry, Commerce and Mipymes released the front to other derivatives such as avtur, kerosene and fuel. oil, in its two varieties.
The fuels affected by sharp price increases are those used in aviation and electricity generation.
Forbidden prices
With this new subsidy amount, the government stops increases in LPG of RD$30.63, in premium gasoline for RD$48.87, regular gasoline for RD$58.47, regular diesel for RD$93.58 and optimal diesel for RD$85.10. “From the Government, we have acted, in a minimum margin of action, with maximum transparency and responsibility. And we will continue to do so until the last day,” said engineer Ramón Pérez Fermín, deputy minister of Industry and Commerce.
The official affirmed that the international context continues to be complex and cited that the average from Thursday to Wednesday for a barrel of oil rose to US$115, increasing 16.4% in one week and close to 45% so far in 2022. The deputy minister of internal trade explained that “the armed and diplomatic conflict in Ukraine is far from seeing its end, and with this, we cannot venture how long the dramatic rise in the price of a barrel of oil could last.”
The deputy minister warned that this week’s increases ranged between 30 and almost 100 pesos, and described them as “never seen before.” He added that despite the market imposing these historic increases, the government “will never abandon the Dominican people.”
Last Monday, President Luis Abinader announced that during the next four months the Government will assume new subsidies for fuels and that it would submit a project for zero tariffs on essential imported products of the basic basket. In the case of fuel subsidies, he explained that they will be applied in a range of Texas crude prices between 85 and 115 dollars a barrel. When it exceeds the ceiling level, then the increase will be transferred to the internal prices of fuels, without including the ad valorem tax.
The barrel of WTI rose 3.12% to US$109.33
The price of Texas Intermediate Oil (WTI) closed 3.12% higher at $109.33 a barrel in another day of volatility that has dominated markets since the invasion of Ukraine by Russian forces. According to data at the end of operations on the New York Mercantile Exchange (Nymex), WTI futures contracts for delivery in April totaled 3.31 dollars compared to the previous close.
