The fuel bill for the Dominican Republic was in the news this week, as Venezuela announced its plan to finance up to 25% of the Dominican oil imports. Nevertheless, economist Ramon Flores points out that the oil bills for the country have increased by 208% over the past eight years. In his opinion, the DR consumes fuels as if it were one of the rich, developed, oil-producing nations, while it buys fuels as if it were one of the greatly poor nations and is, as time goes on, more and more dependant on these imports for its economic development. According to the article in Hoy, this happens because the country does not have any government scheme to stimulate savings in fuel consumption, nor is there a consciousness among consumers about the importance of reducing fuel consumption. Because of this, the country uses 50 million barrels of oil a year at a cost that nears US$1.5 billion. Flores, the president of the Technology Foundation, says that the oil bill may well reach RD$2 billion in the short term, which would cause serious problems for the economy. Currently, oil purchases account for 25% of the value of all products exported from the DR. In the report released by Flores, oil imports cost the Dominican Republic US$470 million in 1996, which equaled 8% of the value of the country’s exports. In 2000, the numbers were US$1.506 billion, equal to 15.9% of the value of the exports, and in 2003, the cost represented US$1.451, equal to 18.4% of the value of exports. Flores warns that if current prices continue for the next year, the country will be obliged to take drastic measures to conserve fuel consumption.
The economist also looks at the situation in the electricity sector and shows that of the 10.4 gigawatts that are produced, only 4.942 gigawatts are actually paid for, representing a mere 48%. As a result of these scenarios, Flores recommends the government eliminate all subsidies by implementing a couple of measures. The first would employ the new ID cards being issued to poor families for the food assistance programs, using them to validate electricity subsidies for the same people. This would subsidize the person, not the product. The second measure would be to make everyone pay for electricity, so that everyone feels the weight of the electric costs and thereby institute savings.