The continuing increases in fuel prices are expected to lead to higher prices of consumer goods and services. The present price of RD$260 the gallon of premium gasoline is a new record. At the change of government in August 2012, gasoline was at RD$228.90.
The last three weeks have been revealing. Fuels consumed the most have increased 10% to 13% between July 2012 and 2013.
According to data from the Ministry of Industry and Commerce, premium gasoline was at RD$228.90 a year ago, and this week is at RD$260.00, an increase of RD$31.10 equivalent to 13.6%.
At the same time, a gallon of regular gasoline that used to cost RD$211.40 in July 2012, now costs RD$241.90, an increase of RD$30.50, or 14.42%. The price of liquid petroleum gas (LPG) was at RD$90, whereas now it costs RD$100.78 which is an increase of RD$10.78, equivalent to 11.97%.
Economists expect the fuel price increases to affect price instability. Furthermore, they predict a considerable increase in prices if the monetary authorities do not intervene to reverse the parallel increase in the dollar. The recent economic measures on the part of the Government and the Central Bank have provoked an increase in the demand for dollars on the part of Dominicans. The natural tendency has been an increase in the exchange rate which closed at RD$40.423 in 2012 and as at yesterday, Sunday 28 July was at RD$41.959.
Economist Bernardo Fuentes has urged the application of changes in the contract between the state and Barrick Gold as an easier alternative to stimulate dollars circulating in the local economy and a way of alleviating the pressure on the exchange rate.
In addition the Dominican College of Economists (Codeco) observes that the dollar rate fluctuations lead to an increase in the prices of goods and services.
Hoy reports, nevertheless, that the rising fuel prices have not reduced local consumption.
http://www.listindiario.com/economia-y-negocios/2013/7/28/286213/Alzas-de-combustibles-afectarian-competitividad-de-las-empresas-del-pais
http://www.hoy.com.do/el-pais/2013/7/28/491835/Alzas-excesivas-combustibles-no-frenan-su-consumo-en-RD