Government will no longer Subsidize Gasoline

The real cost per gallon of the superior gasoline will be ninety lempira’s during the next few days, when the government stops subsiding this fuel completely as part of a “Measure Package” to reduce the government cost. Meanwhile, the gallon of diesel will reach an approximate of 80 lempira’s taking into count the current price of the barrel in the international market.

An option is to exert control in the service stations so that vehicles with rental plates and public transport can be subsided in the diesel consumption and so motorists in particular luxury vehicles pay the real price.

In the case of persons dedicated to productive activities, the identification of the association or cooperative that they belong to will be taken into account, such is the case of coffee producers, agriculturists or industrials.

The elimination of this subsidy to superior gasoline, partial to diesel and the use of stickers that prohibit the circulation of particular vehicles, are part of the special measures the government will adopt nationwide starting the month of March.

This type of dispositions has been announced since this past year but will just start taking effect in March as part of the requirements of the International Monetary Fund (IMF) to be able to sign a Stand By agreement in April.

Authorities from the governments’ Energetic Commission contemplate a new structure on the prices of fuel and it’s derivates for February 20. The government has not mentioned anything about whether they will subsidize LPG gas, regular gasoline and kerosene.

The government has managed to freeze the prices of fuel since October 2007, but this has represented a distribution of approximately 1,000 million dollars in the past 5 months compared to the 500 million during the year 2006.

Statistics reflect that fuel consumption in Honduras annually increases between 5 and 8 percent, because the subsidy attenuates the impact of the increase in the price of fuel at an international level.

In 2007 Honduras consumed over 17 million barrels of fuel elevating the petroleum expenses to more than 1,000 million dollars.

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