14347: de Verteuil: Re: 14342: (Chamberlain) Haitian govt abandons fuel subsidies (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: Patrick & Mica de Verteuil <pdeverteuil@yahoo.com>

Whilst considering the result of the Haitian Government's decision to
abandon fuel subsidies it is important to keep in mind the causes.
The Haitian Government pays for the tankerloads of fuel in US$ and resells
the fuel to Esso, Shell et. al. in Gourdes.

The fluctuations (currently upwards) of the World Market price obviously
affect the equation. However the really crucial factor is the relationship
between the Gourde and the Dollar. The fuel prices current until January 1st
were established at a time when the $ was worth 16 or 17 Gourdes. Today it
trades at upwards of 37.

Continuing the subsidy (at an ever increasing rate) could only be done by
printing more Gourdes which would of course further depress their value and
on and on in an infernal cycle.

Regretfully reality has caught up with us.

Patrick