1996News

Petroleum prices could affect foreign debt payments

Economist Porfirio Garcia considers that if the United States-Iraq conflict continues, the country will have to find more US dollars to purchase the same quantity of petroleum, which will contribute, in his judgment, to increase the balance of trade deficit and limit the government’s revenues. He mentioned that the price of oil has reached US$23.55 per barrel. He added that the petroleum differential tax, which has been estimated to generate about RD$3,850 million per annum, will drop, thereby affecting the government’s capacity to pay its debts. Currently, the monies derived from the petroleum differential are passed directly to the Central Bank for the repayment of the country’s foreign debt.