The Ministry of Industry and Commerce said yesterday that vehicular transportation is subsidized to the tune of RD$2 billion a year, but this is not reflected in the fares. Administrative Deputy Minister Frank Lopez explained that the public transport fares have always been based on the price of gasoline. He said that transporters have never set the price according to the price of propane gas, which is subsidized.
Lopez explained that of the RD$5 billion annual subsidy for propane gas, households purchase only 60% for domestic use, while vehicular transport consumes 40%. He explained that the previous government allotted RD$9.1 billion for the subsidy that was reduced to RD$5 billion in the present Fernandez administration, when the industrial sector was excluded from the subsidy. Only LPG sold in tanks of 100 lbs or less is subsidized today. Of this amount households receive RD$3 billion and vehicular transport consumes RD$2 billion.
He explained there is a great disparity between domestic and transport consumers. He explained that while a household will consume RD$450 every 45-60 days, a taxi will consume 20 to 30 times more.
Data from the Technical Transport Office (OTTT) shows that taxi drivers have pegged the price of their services to RD$92.10 unleaded regular gasoline price, while only 12% of these use this fuel, and instead 83% use propane gas. Lopez stated that the fare prices have always been based on the price of gasoline.
El Caribe newspaper points out that if the subsidy to LPG sold to vehicles were eliminated, they would have to pay RD$1,029.6 pesos per 100 lb tank of gas, 83% more than what they pay today, that is RD$562.5.
The government has budgeted RD$2.8 billion for the subsidy to propane gas this year, of which it has already spent RD$1.7 billion. The subsidy should have only continued through March, when a government program to distribute cash cards to the poorest households would be in effect. These cash cards would be used to purchase subsidized propane gas.
The Ministry has said that the final word on whether the subsidy for public transport will continue will come from President Leonel Fernandez, who returns this weekend.