from dr1 news, in english:
Government withdraws fuel subsidy
After six years when RD$24 billion in diesel and propane subsidies were paid to transport companies operating as a passenger and cargo cartel, the government has announced the end of tax-free diesel to cartel members and the additional Bonogas subsidy. The Ministry of Industry and Commerce issued Resolution 233 cancelling the subsidies.
In a press conference held on Thursday, 13 October 2016, the Minister of Industry and Commerce, Tem?stocles Montas said that the subsidy was introduced in 2011 (Decree 183-11) when fuel prices shot up on international markets. Montas says that the price per barrel of petrol has stayed below US$50 and that no compensation is necessary in the current conditions.
Montas said that the cargo and passenger transporters have been receiving around RD$4 billion a year in subsidies to ensure they do not increase their fares. In addition, 14,727 people registered were receiving RD$50,366,340 a month. Every year, the drivers received RD$604,396,080 in subsidies for propane.
The government says that the privileges have created a cargo and passenger monopoly, as these benefits have turned into profits for the transporters.
The government now admits to yielding to the transporter strikes, threats and protests that have reached vandalism levels as the drivers over the years have fought to keep the privileges, and turning these transport business owners into millionaires. The former president of Fenatrado is in jail awaiting trial for the murder of the former rector of the UASD, Mateo Aquino Febrillet. The former president of Unatrafin, Arsenio Quevedo is in jail accused of ties to a network of contract killers held responsible for murder of several rival transport companies and of asset laundering.
Speaking at the press conference, economist Fabricio G?mez criticized the way in which the transport cartel has become an obstacle to systemic competitiveness.
Gomez mentioned the National Plan for Cargo Logistics in the Dominican Republic, which is under review. He criticized the fact that 80% of the cargo is transported by members of the National Federation of Dominican Transport (Fenatrado).
Gomez explained that the study shows that due to the absence of formal transport companies with structures and managerial procedures designed to provide services the country does not have the regulatory framework to establish the requirements for transport services.
The beneficiaries of government subsidies include Conatra, Fenatrano, Unatrafin, Mochotran, Fenatrado, Fentracon and Caribe Tours.
The transporters have all but said that war is imminent. They are running a radio campaign warning the government that they will not accept what they describe as its complicity with the country’s leading business groups to affect their business interests. Business groups have constantly called on the government to act to allow free competition in the transport sector and for the cargo owners to have the freedom to choose who transports their goods.
Fenatrado president Ricardo de los Santos said that the public would suffer if their interests were affected.
Before the press conference, Antonio Marte of Conatra had already posted a message on Twitter threatening: “If the government wants us to stop the country, so be it.”
Industry and Commerce Minister Tem?stocles Mont?s said at the press conference: “The government knows that a large part of the subsidy, which is currently four million gallons [of diesel] a month, is not used for the purpose for which it was originally conceived. Almost half is being used for other purposes and this has practically invalidated the nature of the subsidy and created a serious distortion in the fuel market.”
