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#4914: Price of gasoline to go up (fwd)

From: Max Blanchet <MaxBlanchet@worldnet.att.net>

According to Radio Métropole, President

Préval has announced that the price of gasoline

will go up shortly, in time to match a similar increase

in the DR.

Currently, regular sells for 33.50 Gourdes per gallon

and super for 37.50 Gourdes per gallon, or US $1.52

and US $1.70 per gallon respectively on the basis of

22 Gourdes per us dollar.  At those prices which are

below cost to the petroleum companies (CIF basis)

the GOH is effectively subsidizing the price of gas.

And it is reported that the GOH has fallen behing

in paying this subsidy to the oil companies.

The matter was not dealt with during the electoral

period for obvious reasons but must now be addressed

for, in the words of Haiti en Marche, the GOH is

"à bout de souffle" financially.

All of this is happening due to the significant

increase in the price of crude oil - from less than

$10.00 a barrell to more than $30.00 today. The

recent devaluation of the Gourde is another factor.

There are rumors that prices will have to be boosted

to 50 - 60 Gourdes, or US $2.27 - 2.73 for an increase

of 49.3 - 60.6 %.

The situation is even more dire for EDH which has

experienced similar increases in the price of fuel

for its thermal units. I was told that due to line losses,

the "konbèlann" phenomenon and illegal kookups,

EDH's revenues do not even cover its variable costs.

What will the reaction of the people of Haiti be to

the devastating impact of such increases on

transportation costs in particular and the cost of

living in general?

This may very well be the biggest test of the new

Lavalas administration.