Dominicans want transparency

Chip · Aug 16, 2011

Here is another example of what I've seen more and more here in the DR; the people wanting to see the inner workings of the governmental and where the money goes. In this particular instance some community groups and transport unions are suing the Commerce Minister in court to reveal the methodology by which price for fuels are set because the ministry has refused to provide this information. In any other modern country it would be laughable that a public official could get away with such mischief but here at least for now it appears par for the course. The minister in question, Manuel Garc?a Ar?valo, obviously is proud of his Mugabe like tactics, too bad we can't send him to Zimbabwe.

La Informacion Digital

AJL6767 · Aug 16, 2011

The transport unions and the PRD funded groups are only interested in 1 thing. Discrediting and destroying the presernt government. The unions only want the government to pay more and more of the fuel costs for them, and they do not want to absorb any of the costs themselves. They know as well as you do, that the world markets control the price, not the small island country known as the DR. The PRD tactics haven't worked for them so they have financed, but hidden behind, things like the 4%.
Look back over the last 12 years. I have seen in the newspapers the figures where the pricing comes from, and how much is allocated as taxes. All you have to do is look it up for yourself.

Chip · Aug 16, 2011

AJL6767 said:
The transport unions and the PRD funded groups are only interested in 1 thing. Discrediting and destroying the presernt government. The unions only want the government to pay more and more of the fuel costs for them, and they do not want to absorb any of the costs themselves. They know as well as you do, that the world markets control the price, not the small island country known as the DR. The PRD tactics haven't worked for them so they have financed, but hidden behind, things like the 4%.
Look back over the last 12 years. I have seen in the newspapers the figures where the pricing comes from, and how much is allocated as taxes. All you have to do is look it up for yourself.

The quick research I did says the law is anything but simple and transparent as reported by Diario Libre among others:

La Ley de Hidrocarburos fij? en 2001 un complejo y poco transparente sistema para el c?lculo de los precios de los combustibles y estableci? que las tarifas se modificar?an cada semana con base en los precios internacionales del petr?leo, la inflaci?n y otras variables.

Choferes protestan por alzas en combustibles

However, if you have other information post it here. I searched google.com.do for all pages about this topic from Dominican servers.

AJL6767 · Aug 16, 2011

Just 2 weeks ago in the Hoy newspaper, they had it line by line both in $ values and % values. They probably have it in their archives. Also, a very large # of the carro publicos are running on propane, and some on natural gas. Why should they be exempted from having to absorb any differentials in international prices.? I have to do it with electric, gasoline and food every day. Maybe also spending less on beer and rum after work would help their pockets a bit.

Chip · Aug 16, 2011

AJL6767 said:
Just 2 weeks ago in the Hoy newspaper, they had it line by line both in $ values and % values. They probably have it in their archives. Also, a very large # of the carro publicos are running on propane, and some on natural gas. Why should they be exempted from having to absorb any differentials in international prices.? I have to do it with electric, gasoline and food every day. Maybe also spending less on beer and rum after work would help their pockets a bit.

You apparently didn't read the article because it is not just the transport unions that want to know but other community groups as well - unless of course you are happy with paying almost 90% taxes on imported fuels while the government lavishly spends money on themselves.

AJL6767 · Aug 16, 2011

Where do you get the figure of 90% taxes from? I thought you could not locate any figures. Everyone wants everything at no cost to them. Just like in NY.l. teachers who want more $ but dont want to teach, etc. Many of the community groups you write about are being duped by the PRD and its allies. All they want to accomplish is their return to the palacio. Sometimes you have to read between the lines. I have close to 40 years experience in the DR and know how they play the game.

Chip · Aug 16, 2011

AJL6767 said:
Where do you get the figure of 90% taxes from?

And I though you had all of the figures, go figure. I did research per your instructions and a news article said the taxes were estimated at 80+ percent but honestly I wouldn't be surprised if it's more.

BTW, would you mind please explaining all the services "at no cost" as you put that Dominicans have? Honestly, you are starting to sound like a Dominican politician - justifying worthless policies and making claims with little to back them up.

rubio_higuey · Aug 16, 2011

@AJL6767. I don't think the call and formula for calculations has changed since late 2010. The world oil prices (WTI) is now at same levels than in fall of 2010, however, we are paying much higher prices now.

rubio_higuey · Aug 16, 2011

@AJL6767 you write like PLD lambon

World Market rates
8/aug/2011 9/aug/2011
81.27 79.32

Set by SEIC
for week 13/aug till 19/aug/2011

REGULAR: 210.30
PREMIUM: 227.20
GLP: 104.20

Compare to:

World Market rates
4/oct/2010 8/oct/2010
81.43 82.83

Set by SEIC
for week 9/oct till 15/oct/2010

REGULAR: 156.20
PREMIUM: 165.80
GLP: 82.79

References and considerations:
WTI historical daily rates: Cushing, OK WTI Spot Price FOB (Dollars per Barrel)
SEIC weekly oil games: Hist?rico de precios de combustibles

Then: Early October 2010 with the same world rates as mid-August 2011. Now: Over 30% average more expensive final rates consumers pay compared to October 2010 in 2010-value-pesos (adjusted for currency exchange and inflation).

Consideration: First 2-3 days of the week used by SEIC for rate calculations.

rubio_higuey · Aug 16, 2011

AJL6767 said:
Just 2 weeks ago in the Hoy newspaper, they had it line by line both in $ values and % values. They probably have it in their archives.

Hijito, the problem is not in line-by-line summary but by "what is" the import price.
Line by line summary is here
AUGUST 13, 2011: http://www.seic.gov.do/baseConocimi...bles/Aviso precios combustibles 2011-271.pdf
OCTOBER 9, 2010: http://www.seic.gov.do/baseConocimi...ibles/Aviso Precios Combustibles-2010-177.pdf

The demanded transparency is not in line-by-line display, but in transparenting the "import price". How come that with the same world oil prices on August 8, 2011 corresponding to the same world oil price on October 4, 2010 (US$81 per barrel) the "import parity" rate is over 35% higher?

The question is not line-by-line display, but WHAT the #$#$#$ is IMPORT PARITY RATE??

According to THIS document:
Precio paridad Importacion is
PPI = FOB + FT + SM + CB+ OC+ CMT+GAL
FOB = oil price FOB foreign market
FT = tanker transport cost
SM = insurance
CB = financing and banking transaction cost
OC = other costs
GAL = Administrative Cost by Law

GAL= Gasto de Administraci?n de la Ley: Correspondiente a un elemento de costo local que se agrega a la formula de paridad. El mismo se refiere a una comisi?n que la SEIC establecer? mediante resoluci?n, a los fines de cubrir los costos relativos a la fiscalizaci?n y supervisi?n de las recaudaciones del impuesto en que incurra la SEF. Esta comisi?n ser? liquidada semanalmente por las empresas importadoras y remitidas en cheques certificados a la SEF, la cual establecer? el fondo de fiscalizaci?n correspondiente.

So apart from 54% tax by law 112-00 and 16% ITBIS, we also have some mysterious GAL tax which is determined by SEIC and absolutely nobody knows how. The higher the PPI rate, the higher the Law 112-00 tax and the higher the ITBIS. So it's a snowball, or multiplication effect.

If you still keep justifying the retail gasoline/diesel/GLP cost, I have only one word to say to you: botellazo de lambon peledeista.

SEIC is robbing the population blind!!! it really need transparency and supervision/oversight in setting the retail prices.

Chip · Aug 16, 2011

rubio_higuey said:
@AJL6767 you write like PLD lambon

World Market rates
8/aug/2011 9/aug/2011
81.27 79.32

Set by SEIC
for week 13/aug till 19/aug/2011

REGULAR: 210.30
PREMIUM: 227.20
GLP: 104.20

Compare to:

World Market rates
4/oct/2010 8/oct/2010
81.43 82.83

Set by SEIC
for week 9/oct till 15/oct/2010

REGULAR: 156.20
PREMIUM: 165.80
GLP: 82.79

References and considerations:
WTI historical daily rates: Cushing, OK WTI Spot Price FOB (Dollars per Barrel)
SEIC weekly oil games: Hist?rico de precios de combustibles

Then: Early October 2010 with the same world rates as mid-August 2011. Now: Over 30% average more expensive final rates consumers pay compared to October 2010 in 2010-value-pesos (adjusted for currency exchange and inflation).

Consideration: First 2-3 days of the week used by SEIC for rate calculations.

Thank you.

I know see the citizen's concerns as to how the Dominican government can raise the fuel prices so much while the market rates haven't changed accordingly. It's pretty apparent why Sr. Ar?valo and the PLD would not want to have to justify the cost increase even though by law they have too. then again when has breaking the law ever deterred them. After all, it is for the benefit of the Dominican people and all the numerous free services they receive.

playacaribe2 · Aug 16, 2011

rubio_higuey said:
@AJL6767 you write like PLD lambon

World Market rates
8/aug/2011 9/aug/2011
81.27 79.32

Set by SEIC
for week 13/aug till 19/aug/2011

REGULAR: 210.30
PREMIUM: 227.20
GLP: 104.20

Compare to:

World Market rates
4/oct/2010 8/oct/2010
81.43 82.83

Set by SEIC
for week 9/oct till 15/oct/2010

REGULAR: 156.20
PREMIUM: 165.80
GLP: 82.79

References and considerations:
WTI historical daily rates: Cushing, OK WTI Spot Price FOB (Dollars per Barrel)
SEIC weekly oil games: Hist?rico de precios de combustibles

Then: Early October 2010 with the same world rates as mid-August 2011. Now: Over 30% average more expensive final rates consumers pay compared to October 2010 in 2010-value-pesos (adjusted for currency exchange and inflation).

Consideration: First 2-3 days of the week used by SEIC for rate calculations.

Rubio:

Do you know if they are they using WTI ($84 +/-) in the calculation or Brent ($107 +/-)

Respectfully,
Playacaribe2

rubio_higuey · Aug 16, 2011

AJL6767 said:
Where do you get the figure of 90% taxes from?

like here:

Input:

http://www.seic.gov.do/baseConocimi...ibles/Aviso Precios Combustibles-2010-177.pdf

http://www.seic.gov.do/baseConocimi...bles/Aviso precios combustibles 2011-271.pdf

Consideration:

Using Gasolina Premium

Oct-09-2010-PPI: RD$82.34
and for purposes of this calculation we will consider that that this particular PPI does not include GAL even though it actually does (for referencing to GAL see my posts above)

Aug-13-2011-PPI: RD$114.33

PPI difference = GAL: RD$31.99
Ley 112-00: RD$62.11
ITBIS: RD$18.29

PPI base October 9, 2010: RD$82.34
PPI+taxes August 13, 2011: RD$194.73

Net taxes (PPI+taxes - PPI base) = 112.39

Net Tax Rate (taxes added on top of PPI base) = 136.5%
Taxes as value of price before transport and wholesaling: 57.7%
Taxes as value of retail price: 49.5%

So the tax rate is not 90%, it's 136.5% actually!

rubio_higuey · Aug 16, 2011

playacaribe2 said:
Rubio:

Do you know if they are they using WTI ($84 +/-) in the calculation or Brent ($107 +/-)

Respectfully,
Playacaribe2

They use Venezuelan oil. Venezuelan oil is sold by WTI prices. Brent is not much used around here, it's used in Europe (Arabian oil and North Sea oil). US, Mexican, Venezuelan oil is sold by WTI prices.
http://blog.gasbuddy.com/posts/The-...crude-oil-Brent-WTI-more/1715-434612-493.aspx

However, I am 1000% positive that the SEIC people will say they use the one that better fits their agenda. Some weeks the prices go up because WTI went up, then because Brent blend went up, then because the derivative prices went up, then because there is a revolution in Lybia (which has zero effect on world prices as I proved in my recent term paper on my MBA), then because the comet is bringing the world to the end ...

rubio_higuey · Aug 16, 2011

how PPI is calculated: http://www.seic.gov.do/hidrocarburo...e paridad para la importación de petróleo.pdf

The best joke is "GAL" (Gasto Administrativo de Ley).

playacaribe2 · Aug 16, 2011

rubio_higuey said:
They use Venezuelan oil. Venezuelan oil is sold by WTI prices. Brent is not much used around here, it's used in Europe (Arabian oil and North Sea oil). US, Mexican, Venezuelan oil is sold by WTI prices.
The difference between types of crude oil- Brent, WTI, more - Gasbuddy Gas Prices

However, I am 1000% positive that the SEIC people will say they use the one that better fits their agenda. Some weeks the prices go up because WTI went up, then because Brent blend went up, then because the derivative prices went up, then because there is a revolution in Lybia (which has zero effect on world prices as I proved in my recent term paper on my MBA), then because the comet is bringing the world to the end ...

Rubio:

I understand that they may not use Brent in the D.R., but they may very well price off of it.....when it suits them.

Also, it is my understanding the oil from Venezuela is so heavy and thick, thay its best use is for No.2 fuel oil/diesel. I am told although it can be refined into gasoline for automobiles the process is far more expensive than conventional WTI or Brent.

Respectfully,
Playacaribe2

kimbjorkland · Aug 16, 2011

I can't comment on how the oil price is specifically calculated (perhaps a dart board or deck of cards are used along the way), but I can comment on the original poster's assumption that Dominicans want "transparency".

As with all things on this island, not all is at it seems to us outsider gringos. One side will shout transparency when it serves their purpose, but is that what they're really asking for? or are they just screaming it for momentarily partisan reasons? Would they put up with transparency of their own internal financial affairs? From experience, dile que no!

Don't jump to the conclusion so quickly that the locals' actions are as altruistic as our intentions!

Chip · Aug 16, 2011

kimbjorkland said:
I can't comment on how the oil price is specifically calculated (perhaps a dart board or deck of cards are used along the way), but I can comment on the original poster's assumption that Dominicans want "transparency".

As with all things on this island, not all is at it seems to us outsider gringos. One side will shout transparency when it serves their purpose, but is that what they're really asking for? or are they just screaming it for momentarily partisan reasons? Would they put up with transparency of their own internal financial affairs? From experience, dile que no!

Don't jump to the conclusion so quickly that the locals' actions are as altruistic as our intentions!

I suppose you are happy with the prices you are paying, or maybe you don't have to buy gas or propane. At any rate comments like yours and AJL6767 leave me dumbfounded to say the least, good grief. Furthermore, to state that most Dominicans don't want transparency in their government is just about as far out there as I've heard.

Hipocrito Mejia · Aug 16, 2011

Like I wrote on a different thread; things in DR are slowly changing. Sure, there is a group of people (drivers' unions) that jumped on the bandwagon for this lawsuit, who are looking out for their own financial and political interests, and have historically been financed by the PRD to wreack havoc on the opposition. However; this lawsuit is being spearheaded by a non-political citizen group, in much the same way that the 4% for education and the cement plant in Samana protests were.

So, as much as a lot of people may not think so; there is a growing segment of the population that is demanding transparency from their government, because they are finally waking up to the fact that it is one of their basic rights. The days on being scared to speak out because of government reprisal, like in the Balaguer years, are slowly but surely going by the wayside.

NotLurking · Aug 18, 2011

It's the same the world over.
Gas prices worldwide: Norwegian gas is double U.S. price - Mar. 10, 2011

http://www.dominicantoday.com/dr/ec...can-Republic-2009-fuel-imports-of-16B-gallons

The Dominican republic imports about 25,000+ barrels of crude per day and not all of it comes from Venezuela. All the gasoline used in DR is not refined here either. The DR also imports gasoline, propane & natural gas. Refined products like gasoline and propane are not very cheap on the international market. This is not to say gas couldn't be cheaper but I don't think it can be as cheap as RD$164 (US$4.31) today, considering the DR has no natural fossil fuel reserves and the global demand for energy has increased about ~11%.

NotLurking

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