Petroleum prices in the DR will now be pegged to international market variations. President Hipólito Mejía signed the Petroleum Law 112-00 that is now being applied. Yesterday, the Ministry of Industry and Commerce issued Resolution 210 that cuts the price of premium gasoline from RD$39.80 to RD$38.22 and that of unleaded regular gasoline from RD$34.90 to RD$33.44. The government announced increases in regular diesel from RD$22 to RD$24.79, and premium diesel that will go from RD$25 to RD$26.87. Avtur (used by airlines) was increased from 20 to RD$22.86 and kerosene went from RD$20 to RD$26.53. Supposedly, these new prices reflect an elimination of government subsidies. These prices will be in effect as of Saturday morning. The increases have been criticized because they cut the price of the gasoline used by luxury cars while increasing that of fuel used by trucks and industry and power plants, which will result in new price increases. The subsidizes have been eliminated on one hand, but they continue on the other. While the government this week announced increases to the price of propane gas, it also says it will expand its plan to subsidize those filling 50 lb. tanks. The government also announced it will be setting up two propane gas stations with subsidized prices for taxi drivers that use propane gas. Sectors also complained that the increase occurs when there has been a decline in fuel prices on world markets from US$34 in November to the present US$29. There are now doubts as to the application of the new law that sets fixed taxes on fuel prices. Inflation this year is expected to top 10%, after three years at 7 and 8%, according to Governor of the Central Bank, Frank Guerrero Prats.
