domingo, septiembre 25, 2005

Consumers to Pay Twice For fuel?

DR1 is relating el Dia question to the Dominican Goverment. Maybe that is why electricity generation will now be involved in the deal. However, the end user distortion on the costs of energy will get even larger for those that receive unreliable service. The rich will become richer, the poor poorer, unless gas prices at the retail pump get the same treatment too.

El Dia newspaper is asking the government to clarify the Petrocaribe deal. The editorial points out that a questionable aspect of the Petrocaribe agreement is the issue of the 40% of the petroleum fuel that Venezuela will finance. The editorialist points out that the consumer is paying a price in gas stations that already covers 100% of the cost of fuel consumed.
However, the deal establishes that for every barrel of petroleum the government purchases from Venezuela, the government will only pay 60% in the short term, despite returns of 100% from consumers. 40% of the 100% instead will be converted into public debt that the population will be asked to pay for again in the future.

In other words, consumers will be paying for this 40% twice. The editorialist asks the government to explain what it is going to do with the savings that theoretically could reach US$400 million this year, ta! king into consideration that Petrocaribe covers the purchase of up to 50,000 barrels of petroleum at the market price of US$64 per barrel.

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