Dominican sectors are divided over whether it is in the better interest of the nation to reduce or not the price of gasoline and gasoil. The Fernández government is benefiting from a windfall of increased tax money due to the decline in the price of petroleum. Fuel is heavily taxed in the DR. The high prices are considered a lid on excessive consumption of fuel. The DR is a net importer of fuel products. The argument of many that do not favor a decline in prices is that even with the high prices of fuel there has been an increase in fuel consumption of 11% during the first five months of the year. From January to May, the DR consumed 2,378.9 barrels, compared to 2,286.8 barrels for the same period in 1997. The Fernández government increased the price of non-leaded gasoline to RD$32 from RD$20 in December 1996 responding to the high crude prices at the time. The government has since then reduced the price of fuel up to 68%. Since October 1997, when the cost of a barrel of fuel was US$23 per barrel, the later has dropped to a low US$10.55 last week. The government had promised to adjust the prices of fuel downward or upward, but the drops in prices have not met with the expectations of consumers. Advocates of a price reduction say that a decline in the price of fuel would reduce the cost of living in the DR, benefiting all sectors. Ignacio Méndez, president of the Asociación de Industriales de Herrera, an important industrial association, favors the government keeping its promise of reducing the price of fuel, starting with a drop in the price of gasoil that has a direct effect on production. The president of the Association of Industries, Nassim Alemany, nevertheless, alerted that the present drop in crude could be only temporary. Other sectors say that the government should reduce the prices of non-leaded fuel in a much greater proportion than those of leaded fuel to stimulate an increase in the consumption of non-leaded versus leaded fuel. The Ministry of Industry and Commerce said in a press conference that the government needs to study reports from the Refinería Dominicana de Petróleo, and await the results of a meeting of OPEC to be held today. The government’s decision would not be announced for another three weeks, he said. OPEC ministers have said they would like to reduce the production of petroleum to confront the worst decline in prices in the past 12 years.
