El Caribe

Maintaining a fuel subsidy is difficult

Fabricio Gomez Mazara.

Businessman and economist Fabricio Gómez Mazara considered that, although the subsidy established for fuel prices is correct, it will be difficult for the government to maintain it, due to the “heavy” burden it represents for the national budget.

He also argued that lowering the price of fuel and other products that have been impacted by the crisis experienced worldwide is beyond the government’s reach. Before this situation, Mazara understands that the government would have no other alternative than the partial or total dismantling of said subsidy, which was established temporarily to mitigate the effect of the rise in oil in the international market. He specified that to illustrate the unsustainability of the measure, he cited the announcement made by the Ministry of Industry, Commerce and SMEs that the subsidy corresponding to last week amounted to 1,130 million pesos.

“We understand that no subsidy should be maintained permanently, it is something that should be transitory, so we must contemplate the total dismantling and in a staggered manner due to how unsustainable it is for the Dominican State,” he argued.

He specified that the projections are that during the next six months a barrel of oil will remain between 100 and 105 dollars, whose price was contemplated in the current Dominican national budget at 65 dollars, so the subsidy is draining public finances.

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