Saturday, September 30, 2023

They reintroduce a bill that proposes fuel prices to be set every 15 days

In the Senate of the Republic, at the beginning of February of this year, a bill that seeks to reorganize the hydrocarbon sector in the Dominican Republic was deposited for the second time. The legal initiative is the authorship of the legislator by María Trinidad Sánchez, Alexis Victoria Yeb, but also has the support of Senator Ramón Rogelio Genao, representative for La Vega. The proposed amendment to the Hydrocarbons Law had been submitted, for the first time, by the Executive Branch.

The document, in its Article 4, proposes a modification of Article 8 of Law 112-00, so that it reads as follows: “The Ministry of Industry, Commerce and Mipymes (MICM), through resolutions that it will issue to that effect every 15 calendar days, it will establish the prices for sale to the public that will govern the fuels referred to in table 1 of Article 1 of this law”. In essence, it is the same text of the original project.

In addition, it indicates that the prices must reflect the prices of fuels in the international market and the exchange rate provided by the Central Bank of the Dominican Republic. It establishes that the resolutions must be published in a national circulation medium and must break down the elements that make up the retail price of each fuel, including taxes, marketing margins and temperature adjustment.

Following the original proposal, it proposes to modify Article 10 to eliminate the regulation of calculation and cost components that is currently established in the import parity prices (PPI) and the 13 cost components that comprise it are specified in the law itself , which are: Free On Board (FOB), Premium (P), Freight (FT), Maritime Insurance (SM), Intermediation Cost (CI), Certification Expenses (GC), Bank Costs (CB), Maritime Losses (PM), Inventory Costs (CIV), Financial Coverage for oil and its derivatives -hedge- CF), Terminal Management Charge (CMT), Exchange Difference (DC) and the much questioned Administration Expense of the Law ( GAL).

In 2021, President Luis Abinader announced that his government will present the National Congress a project to reform the Hydrocarbons Law 112-00, with the objective of reviewing the cost structure and everything related to the current setting of fuel prices.

In it speech of accountability before the National Assembly, the president explained that from August 16 to that date the price of oil had increased by more than 45%, going from US$42.34 a barrel to US$63 a barrel. In the case of liquefied petroleum gas (LPG), as he said, the increase is larger and reaches up to 79%.

President Abinader explained that only in the first two months of 2021, and to alleviate these increases, the Government has had to assume costs of RD$967 million.

The president made the announcement of the reform of the Hydrocarbons Law after explaining the negative impact that the international price of fuels is having on the agricultural sector and on the products of the basic basket consumed by the Dominican people.

“Unfortunately, this sector depends to a large extent on imported inputs, whose prices, in international markets, including the high transportation costs, derived from the increase in the price of oil, have experienced exorbitant increases, which translate into increased prices for the consumer. local”, reflected the president in his first accountability speech since he assumed the leadership of the Executive Branch on August 16.


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