Caribbean & Central America - May 2011 (ISSN 1741-4458)

The easing of international oil prices which particularly helps the oil importing Dominican Republic has not led the Fernández government to lower its high hydrocarbon taxes as it appears intent on increasing revenues ahead of the 2012 presidential election. A recent survey conducted by the daily Listín, found that petrol prices in the DR are among the highest in Central America and the Caribbean. This is mainly due to high taxes on gas and diesel which reach RD$72.71(US$1.92) per gallon, and RD$67.98 (US$1.80) per gallon respectively. As a result, retail prices of premium and diesel blends in the DR currently stand at US$5.88 and US$5.17 respectively, well above the sub-regional averages of US$4.21 and US$3.95. This is despite the fact that like many of its neighbours, the DR receives close to 35% of its oil from Venezuela’s PetroCaribe initiative which allows it to finance payment for its oil supply over 25 years. While its regional peers adjust domestic oil prices on a monthly basis, the DR does so week by week. Despite the easing in international oil prices, the government has opted to keep local prices stable since the beginning of the year. As part of further efforts to raise cash, the finance ministry has also submitted a formal request to congress for the issuance of sovereign bonds in the domestic market as stipulated in the 2011 budget. According to Finance Minister, Daniel Toribio, the government is seeking to place RD$25.3bn (US$6.6m) worth of bonds in the domestic market, where the government believes it can raise funds in the most favourable conditions.

End of preview - This article contains approximately 283 words.

Subscribers: Log in now to read the full article

Not a Subscriber?

Choose from one of the following options

• Subscribe
• Sign up for a one-time, 14-day trial