Lower gasoline prices to benefit consumers

PANAMÁ. The government will give $6 million dollars to oil companies and gasoline distributors to avoid an increase in the fuel costs and stabilize prices. It has also imposed a price ceiling to give consumers a respite from the constant variation in the fuel costs. The measures will be implemented from September 25 to October 8.

The ceiling prices chosen by the government are based on those of the international market on September 3, 2008.

The Affairs of the Canal Minister and Secretary of Energy, Dany Kuzniecky said that the government’s decision was aimed at finding a solution that will allow it to implement permanent measures to fix fuel prices and give consumers significant savings.

Kuzniecky added that although the fuel costs in Panama will always be subject to the international market prices, new mechanisms should be studied to control the prices, because it affects the value of many products.

The minister said that under the instructions of President Martin Torrijos the planned announcements about new fuel prices were suspended, because a gallon of gasoline would have gone up by 80 cents, pushing prices close to $5.

He explained that this period will be used as a test to obtain the first results of a survey that will be analyzed to understand the structure and behavior of the hydrocarbon market and to determine if the current mechanisms and formulas are fair and appropriate for the benefit of consumers.

Once the 15 days are up the government will determine what adjustments should be made to the formula.

The maximum price in the province of Panama for the 91 octane gasoline will be $3.99, 95 octane $4.16, light diesel $3.60 and improved diesel $3.63. The costs of fuel in other parts of the country will be different depending of the location and a list has been published.

The Consumer Protection Authority ACODECO (Autoridad de Protección al Consumidor) will have inspectors around the country making sure that the gas stations are complying with the government prices. Those that are not using the correct pricing could be faced with fines from $1,000 to $10,000.

The director of ACODECO, Pedro Meilán said that his organization will do everything in their power to make sure that gas stations are complying with the government’s measures. “We have created teams that will visit every gas station in the country to check their prices.”

This is the second time that Torrijos’ government has taken this kind of measure. On August 17, 2005 there was a reduction in fuel taxes. It was a failure.