The Dominican State has received US$15,138,500 so far this year in compensation payments for the Natural Gas insurance contracted in 2021 by the Ministry of Finance.
The timely acquisition of the insurance has mitigated the impact of the 43.1% increase in the price of Natural Gas since the beginning of the year and is part of the strategic measures carried out by the Ministry of Finance to guarantee budget stability in the face of the international increase in the price of derivatives of the oil.
According to a document sent to the media, the result of the coverage guarantees that the price of this fuel does not exceed US$3.25 MMBtu. The contract was carried out in stages, covering 80% of the import of this fuel from May to December last year, 60% in 2022 and 40% next year.
The price of Natural Gas has increased by 101% since the contracting of this insurance and the coverage has allowed the Government to receive US$51,147,957.9. The total number of claims represents 4.0 times the premium paid for the 2021-2023 period and represents extraordinary income of US$38,355,957.97.
Matrix
This fuel represents approximately 50% of the country’s electricity generation matrix. Therefore, contracting the insurance has made it possible to mitigate the upward effect on the cost of power generation.
With the Natural Gas insurance, the Government has managed to offset the impact of the prices of this fuel on the electricity subsidy and, therefore, on public finances. In addition, the acquisition of the insurance has resulted in an additional benefit to the national treasury.
