NewsWhore
09-17-2008, 05:10 PM
While the government has been quick to pass the oil price increases to consumers, the opposite is not the case. El Dia reports that although the price of oil has dropped by US$55 a barrel in the past seven weeks, a gallon of regular unleaded gasoline has only dropped a mere RD$9. Contradictorily, the price of a gallon of propane has been increasing, in what is perceived as the prelude of the elimination of the propane subsidy. The petroleum law establishes that local prices will float according to international market prices. That means prices that float up when oil prices rise, and they should float down when oil prices decline.
In January, with petroleum costing US$88, the local price for a gallon of gasoline was RD$155 the gallon. By March, a barrel of oil was selling for US$99 and locally, gasoline was priced at RD$167. In June, with oil at US$128, the price was RD$191. When a barrel of oil reached US$147, a record in July, the gallon of gasoline sold for RD$197. Regular gasoline is selling for RD$187 this week.
A report in Diario Libre also looks into the situation, explaining that gasoline is costing RD$31 more than in February, when the international oil price was at the present level. During the week of 16-22 February, the Ministry of Industry & Commerce reported a price of RD$156.30, with the international fuel price at US$100.
The government is raking in the difference, says Ramon Alburquerque, a PRD opposition spokesman and expert in energy matters. He said that now with the barrel at US$92, regular gasoline should be selling for RD$110. "The government is reaping the profits, because if it gets hold of RD$70 per gallon, in addition to taxes, and 240 million of gallons are consumed per year, in a year, it would have made RD$17.7 billion," he said. He estimated the government is making at least RD$48 million a day for failing to pass the difference in prices to consumers.
Superintendent of Banks Rafael Camilo told El Dia that the drop in oil prices means US$150 million in savings for the government.
Central Bank governor Hector Valdez Albizu says the declining prices mean less expenses for the government, not savings. He estimated that the government would need to spend US$652 million less, which is positive for the economy.
El Dia said the government is ignoring public complaints about the high price of fuel.
More... (http://www.dr1.com/index.html#7)
In January, with petroleum costing US$88, the local price for a gallon of gasoline was RD$155 the gallon. By March, a barrel of oil was selling for US$99 and locally, gasoline was priced at RD$167. In June, with oil at US$128, the price was RD$191. When a barrel of oil reached US$147, a record in July, the gallon of gasoline sold for RD$197. Regular gasoline is selling for RD$187 this week.
A report in Diario Libre also looks into the situation, explaining that gasoline is costing RD$31 more than in February, when the international oil price was at the present level. During the week of 16-22 February, the Ministry of Industry & Commerce reported a price of RD$156.30, with the international fuel price at US$100.
The government is raking in the difference, says Ramon Alburquerque, a PRD opposition spokesman and expert in energy matters. He said that now with the barrel at US$92, regular gasoline should be selling for RD$110. "The government is reaping the profits, because if it gets hold of RD$70 per gallon, in addition to taxes, and 240 million of gallons are consumed per year, in a year, it would have made RD$17.7 billion," he said. He estimated the government is making at least RD$48 million a day for failing to pass the difference in prices to consumers.
Superintendent of Banks Rafael Camilo told El Dia that the drop in oil prices means US$150 million in savings for the government.
Central Bank governor Hector Valdez Albizu says the declining prices mean less expenses for the government, not savings. He estimated that the government would need to spend US$652 million less, which is positive for the economy.
El Dia said the government is ignoring public complaints about the high price of fuel.
More... (http://www.dr1.com/index.html#7)