The first month of validity of the decree approved by the Congress of the Republic, which grants temporary support of Q8 per gallon of diesel and Q5 for premium and regular gasoline, will enter into analysis, and Possible scenarios for an eventual extension of the program are already being handledsince it ends on July 31 or when the assigned budget of Q2 billion is exhausted.
Authorities from the Ministry of Energy and Mines (MEM), the Directorate of Consumer Care and Assistance (Diaco) and the Superintendency of Tax Administration (SAT) were summoned to the Finance Commission to present the performance indicators of the validity of the state subsidy.
The MEM reported On May 18, it made a payment of Q175.5 million and another payment of more than Q200 million, so the accumulated amount amounts to Q375.5 million.. In addition, it is expected to know the result of the third disbursement.
Preliminary calculations released in the legislative room indicate an average of up to Q500 million during the three weeks of the support. These indicators will be analyzed in a session scheduled for next week.
According to the vice minister of the MEM, Erwin Barrios, given the trend observed in the execution of the approved budget quota, The resources could be exhausted before the three months of validity end, which led Congress to begin structuring different scenarios.
The consumer reference prices for this week at service stations, in the self-service mode in the metropolitan area, are Q38.64 for a gallon of superior gasoline, Q37.64 for regular gasoline and Q33.96 for diesel.
Subsidy enters first review
Deputy Julio Héctor Estrada, president of the Congressional Finance Commission, confirmed that a meeting has already been coordinated with the authorities of the Ministry of Energy and Mines (MEM) to learn about the behavior of consumption, fuel import prices and a projection on the duration of the subsidy with the resource ceiling approved in the decree, that is, Q2 billion.
In addition, he indicated that it is expected to know what the Executive’s proposal would be, because This instance promotes the continuity of the current subsidy.
The analysis will include the situation of the international oil barrel market and the geopolitical context in the Middle East which, according to the deputy, still does not show signs of stability, although a positive evolution is expected in the coming weeks.
Study scenarios for subsidy
The legislator explained that, according to the projections provided by the Ministry of Energy and Mines (MEM), work will begin on a new proposal to expand the program or, at least, “buffer” the impact on consumers.
He announced that, for the moment, It is not certain that it can be expanded with the same amount of resources allocated nor maintain the current per-gallon support coverage for consumers.
Preliminary calculations released in the legislative room indicate an average of up to Q500 million during the three weeks of the support.
Part of the decision It will depend on the possible negotiations between the political blocs and the requests that some groups may raise, since during the negotiations there was always talk about the possibility of an international reduction. However, that does not happen due to the international context.
“What we did was establish precisely this buffer period to observe, now that a month has passed since April 28, how the market evolves and request initiatives and proposals from the Ministry of Energy and Mines and the Ministry of Finance,” Estrada noted.
They evaluate a new round of subsidies
When asking where a financial approach could come from to maintain the emerging support, the president of the legislative chamber stressed that the debate will take place in June, when the current situation will be analyzed. to carry out the eventual financing operations of another round of subsidy.
Among the scenarios he mentioned are a possible expansion of the current budget, analyzing the situation of fiscal cash balances – that is, financial availability – and committed quotas or, in an extreme case, resorting to public debt.
In any case, he made it clear that an expansion could be approved with a lower degree of intervention.
“What we did was cushion the blow a little for a few months, which will work in the sense of having served to make the transition. I am confident that there will be a solution. Yes, we could know that there will be an extension of the subsidy, so to speak, but if there is a political agreement,” Estrada emphasized.
Oil price remains volatile
According to the vice minister of the Ministry of Energy and Mines (MEM), Erwin Barrios, currently the price of oil and its derivatives continues to be volatile, although it is perceived as more stable. However, it remains on average in the range of US$100.
The expectation, he said, is that it will tend to decrease, but that reduction would not be immediate or as noticeable as the increase was.