#4956: More on the Price of Gasoline (fwd)

[Bob Corbett <corbetre@webster.edu>]

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

Ultima Hora Interactiva, a Dominican Internet
news agency, has announced yesterday that
the DR will increase the price of gasoline by
12 DR pesos or US $0.77 based on an exchange
rate of 15.65 DR pesos per US dollar ( Source
of exchange rate: Friday's NYTimes.)

This means that premiun gas will now sell for $2.54
and regular for $2.23 per gallon.

Given that the GOH has agreed to align Haitian prices
with DR prices to avoid cross-border smuggling in
petroleum products, will Haitian prices go up to the
same levels?

Currently they are $1.70 and $1.52 per gallon for super
and regular respectively (See my previous posting on
the subject below.)

What will the reaction of the Haitian people be?

Will the GOH take and/or can it afford measures that
might soften the blow?
________________________________________
Subject: #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.