The president of the Dominican Refinery of Petroleum (Refidomsa), Amaury Justo Duarte, said that the refinery has lost RD$872 million in the past 30 days. Justo Duarte attributed the recent losses to exchange rate distortions and said that the government had been using a rate for price calculations that did not coincide with the cost to restock. He explained that on 4 January, the country purchased a shipment of crude oil for US$9 million, which was financed by the governmental Banco de Reservas, at an exchange rate of RD$39.06 to US$1. When Refidomsa went to buy dollars on the market with the allotted pesos, however, it had to pay a much higher rate, which he did not cite. The exchange problem dates back to December and January, after President Hipolito Mejia called in the military and reached an agreement with exchange houses and banks to gradually reduce the buying price of hard currency. Mejia’s objective was to see the rate drop to RD$30 to US$1. While the posted buying rate did decline to RD$35 to US$1, there was an acute scarcity on the market of hard currency for sale to the general public, and hard currency sales were diverted to a new black market operation, thereby defeating the purpose of the efforts.
As reported in the Listin Diario, Justo Duarte said that the Ministry of Industry & Commerce is compensating for the losses, which will reportedly be passed on to consumers in the form of price hikes. In order to deal with the volatility of the various markets, the ministry must announce new fuel prices every Friday. Justo Duarte said the refinery expects it will take months before their losses are fully recovered. Last week, fuel prices were at a record RD$105.20 per gallon (up from RD$99.15) for premium gasoline and RD$96 for regular gasoline. A gallon of diesel stood at RD$71.70.
Justo Duarte mentioned that Refidomsa needs US$85 million a month to buy sufficient fuel for the nation. He said that a positive step in the direction of regularizing imports is the decision of the Industry & Commerce Ministry to charge for jet fuel in US dollars.
Justo Duarte is optimistic the crisis will not go beyond this week and said that two ships carrying 180,000 barrels of gasoline and 80,000 of diesel have arrived at the port.
The government continues to subsidize the cost of propane gas at RD$25.00. Justo Duarte said, however, that the subsidy is now at RD$38.28 per gallon of propane gas.