Industry & Commerce Minister Francisco Javier Garcia informs that the price of propane gas will vary weekly, indexed to the cost of fuel and the exchange rate, in the wake of the government’s decision to eliminate the propane gas subsidy to business and industry. The move represents savings of RD$2.76 billion of a total of RD$10 billion in official assistance. DR1 erroneously reported yesterday that a 100-lb tank of propane gas would cost RD$560, whereas the new price is actually RD$1,348, the result of there being 24-26 gallons in a 100-lb tank (24 x $55.19=$1,348). The 250-gallon gas tanks, which are commonly kept in apartments and condominiums and which previously cost RD$6,250 to fill, will now cost RD$14,048, as reported in El Caribe.
The government continues to sell propane gas at filling stations for RD$25 per gallon to those with 100-lb tanks or smaller.
On the TV show Hoy mismo that is produced by Cesar Medina, Cristian Jimenez and Yolanda Martinez, Javier Garcia explained the new mechanism that will be used to direct the subsidized sale of propane gas to low-income families. The minister said that some 500 filling stations have been designated and are being fitted with Veriphone credit card equipment in order to charge the government for the subsidy portion of the sales to low-income families who qualify for the program. These consumers will receive a voucher needed to obtain a refund or subsidy. He said these families will be authorized 12 credits a year. Javier estimates the new system will produce savings of RD$7 to RD$7.5 billion a year for the government.
A census needs to be carried out to identify the beneficiaries. Javier Garcia furthermore said that surveys are being conducted in coordination with churches and special offices in municipalities nationwide to identify the low-income families eligible for program.
These households will be issued credit cards to be used in the new subsidy setup, which will enable them to continue purchasing the fuel at RD$600 per 100-lb tank. The same families, the beneficiaries of what is to be known as the Sistema Unico de Beneficiarios (Siuben), will also qualify for the Comer es Primero program, yet to be announced.
In its editorial today, Hoy newspaper asks whether the government will modify the petroleum tax to remove the portion previously directed to subsidize propane gas. The writer wonders what effect the move will have on public transport, as taxis had predominantly used the subsidized fuel, while pegging their prices to the price of the more expensive gasoline.
The editorialist also notes that the elimination of the subsidy to businesses is likely to bring an increase in the cost of bread as a consequence, for instance. Milciades Villar, of the Villar Hermanos bakery, confirmed to Hoy newspaper that the bakeries will transfer their increased production costs to consumers.
The changes to the propane gas system received the support of the National Association of Hotels and Restaurants, the National Council of Business (CONEP).