The popular demand for the rise in the prices of cheese and other food products of the basic basket in Nicaragua, is only a symptom of the increase in the cost of living and “the lack of State protection” over the rights of consumers, that “they are defenseless”, warns Rubén Ernesto Arriola, from the Consumer Manager Consultancy.
The expert on consumer issues also regrets that the temporary freezing of fuel prices, guided by the Government last October, did not benefit consumers because it was done when, at the national level, it was at its value “higher”, and at the time that the international cost of oil derivatives had a significant drop. “The Government took the measure as a Solomonic way out to lower morale, but the benefits were not extended to consumers and users,” he says.
“The State signed an agreement where consumer rights are human rights. The State must watch over them, but it has only been observing, ”he questions.
In an interview with the programto Tonight – broadcast on Facebook and YouTube due to censorship by the regime – Arriola describes the main problems of consumers with energy subsidies, liquefied petroleum gas, food products and fuels. And given the lack of protection from the State, he proposes: Assert rights through protests and campaigns such as “not to purchase” of products with unjustified increases, such as cheese.
The Government kept the prices of oil derivatives frozen for more than two months when the international value of crude fell almost 20 dollars per barrel, and unfroze it now that they have an upward trend. What impact has this measure generated on drivers, transport users and the population in general?
The freeze did not bear the expected results for Nicaraguan consumers because it occurred at a time when oil prices were higher worldwide, and in Nicaragua, likewise, oil derivatives were too high. Both regular gasoline, super, diesel, kerosene and LPG, in their different presentations, were too high.
The Government took the measure as a Solomonic way out to lower spirits, which was achieved at the time, under encouraged them a little, but the total background was not touched, which was to apply the necessary discounts to benefit, or broaden the range of benefits to consumers and users.
What happened to liquefied gas? In one year the cost of the 25-pound cylinder increased by at least more than 100 cordobas.
The liquefied gas (25 pounds) that we use the most had increased to 457.75. Currently they decreed a reduction, through the INE and the Ministry of Mines and Hydrocarbons, to 430 (córdobas). It is a minimal benefit because the casualties were minimal, they were not extensive or expansive. Purchasing power increased a little, but not enough.
Every time these increases occur in Nicaragua, derived from oil and LPG (liquefied petroleum gas), it is automatically transferred to the Nicaraguan basic basket. The INIDE (National Institute of Development Information) says that it is 16,250 cordobas and 70 cents, a little close to reality. But the reality, at the stroke of a sock, as we say in good Nicaraguan language, is 16,570 cordobas; and this, also adding other members of the basic basket, which are not in it —such as alcohol, boxes of masks, gloves, so as not to get infected with covid-19—, and countless things that have been bought now, and this makes the price of the basic basket skyrocket.
The price of the basic basket, and all its products, increased by 1,300 cordobas from January to December 2021, according to official data. What are the main complaints received from consumers?
That the products are quite high. This week there was a rise in oil derivatives, and it is a domino effect, beans increased by 23 córdobas per pound; rice, which was quoted between 12 and 13 (córdobas), is now at 14 or 15 córdobas per pound. Another product that has increased in price is bulk oil, it is 60 or 65 cordobas per liter, sealed is even more expensive. We also see that some perishables have increased in price dramatically.
The cheese problem made the basic basket more expensive. I never imagined that there would be (a pound of) cheese in 100 cordobas (a pound). This also implies that the basic basket shoots up considerably.
The cost of food products in the basic basket, according to official data, went from 10,115 cordobas, in January 2021, to 11,096 cordobas in December. What reasons are there for this rise?
No producer, no matter how patriotic, is going to take production costs out of the bag; this implies that all these agricultural products, which come from the interior of the country, increase in price. An exhaustive review of the tax on the basic basket should be made; of imported products that are of great need such as: toilet soaps, laundry soaps, detergents; that is, all that imported product makes our basic basket increase in price vertiginously.
Just as the measure was taken to exempt school supplies from taxes, all these products from the basic basket should be exempted, such as: pasta; Worcestershire sauce; ketchup; toothpaste and toothbrush; the toilet paper. (All) should be exempt from taxes; (the basic basket) would drop between 35 and 45%, because you are no longer with taxes. Purchase access would be a little more accessible to Nicaraguan consumers. Because when it was recorded with taxes, even the cuts of meat and chicken were recorded.
In recent weeks, social networks have channeled popular discomfort over the accelerated increase in the pound of cheese. What are the reasons?
The cheese is not meant to increase that way, there is enough milk production according to officials from Faganic (Federation of Livestock Associations of Nicaragua), and other organizations. We started a campaign ‘no to the purchase of cheese’, so that it would go down. Let’s join the campaign, let’s not just do the memes, the jokes, the pranks. (If) another product of the basic basket goes up, let’s do another campaign, let’s not buy that product because it is not its real value, it is an inflated value.
How can we make our rights prevail? Mounting these campaigns. I assure you that if we all got together to carry out this campaign, like the ‘no to the purchase of cheese’ campaign, it would drop to 35 cordobas.
We saw that the State brought cheese producers who were giving it at 50 cordobas per pound, in the old center of Managua. What does it mean? We, together, could lower the price to 30 córdobas.
And what about energy and drinking water services?
With energy, the problem is that as of this year, the energy subsidy is practically being eliminated. Before we had a cross subsidy, that everyone benefited from the energy subsidy of 150 kilowatts, today we don’t. Last year we were paying 7% VAT, (now) if you go from 151 kilowatts to more you pay 15% VAT on the electricity consumption bill. Only those who did not have a refrigerator, fans and other privileges, consume (between) 125 and 150 kilowatts, to be part of the subsidy. The majority of Nicaraguan households exceed the limit of the subsidy.
That is why we talk about the base of the subsidy, increasing it, to benefit consumers and users of the electricity service a little more.
Do the population and the final consumer have any protection or are they defenseless against the rises that are taking place throughout the price chain?
Consumers are helpless. The State signed an agreement years ago where the rights of consumers are human rights, and the State must watch over them, even Article 105 of the Constitution says so: it is the State’s obligation to guarantee that basic services, air, land, maritime and other services, whether supervised by the State or regulated by the State, that are provided with quality, with humanism and with guarantees. But the state has only been watching.
The lack of protection of your rights makes the ordinary citizen assert their rights, through protests in this way: ‘no to the purchase of cheese’. If there were an increase in other products of the basic basket, let us assert our rights, not buying these products, and they would lower their cost.
