In the first nine months of 2004, the Dominican government has paid out RD$21.3 billion in subsidies for propane gas and electricity. These subsidies accounted for 27% of all moneys spent by the government during this period, with total expenditures estimated at RD$79 billion. This year’s subsidy numbers are 184.4% higher when compared to the same period in 2003. The figure is also a “budget-buster,” as the 2004 Budget Law had assigned just RD$6.35 billion to such subvention. The propane subsidy consumed 22.8? of every peso that entered the government’s treasury.
According to El Caribe, the government will now try and focus the financial assistance on those who most need it, meaning yet another blow to the middle class, but there doesn’t seem to be any alternative.
The government council meeting of 23 August heard President Fernandez tell his ministers that the propane subsidy had to be eliminated for everything but domestic home use. This move would do away with subsidies for public transportation vehicles, as well as all industries and bakeries. Nevertheless, the commission that was designated to implement the changes agreed that the subsidy for vehicular use would be continued until December of this year. Current consumption of propane gas represents 22 million gallons a month. The government is also planning to issue a special card that will identify those who are eligible for propane and electricity subsidies. This arrangement will be called the Unique Beneficiary System, and will require a national census to establish precisely who receives the assistance. The IMF insists that electricity be paid for, particularly those consuming more than 200KW per month. The PRD government had created the PRA, the Program to Reduce Blackouts, and the CDEEE has accepted a continuation of these efforts, as they identify those areas most in need of assistance and establish fixed quotas for the payment of electric service. These payments are either RD$100 or RD$200 per month.