LatinNews Daily - 06 April 2022

In brief: El Salvador temporarily freezes fuel prices

* El Salvador’s 84-member unicameral legislature has approved an initiative proposed by the executive led by President Nayib Bukele which freezes fuel prices for April and May. Citing the local think tank Centro de Investigaciones, Estudios Sociales y Económicos de Centroamérica (CIESCA), President Bukele boasted that El Salvador has the lowest hydrocarbons prices in Central America with regular gasoline costing US$4.15 per gallon compared with US$5.20 per gallon in Costa Rica; US$5.21 in Nicaragua, US$5.23 in Honduras and US$5.25 in Guatemala. This is the latest measure taken by the Bukele government in response to the surge in fuel prices following Russia’s invasion of Ukraine. It follows the approval last month of a reduction in value-added tax (VAT) on fuel for 15 days. Also last month Bukele announced 11 measures aimed at reducing the impact of the increase in energy prices. These include the suspension of two fuel-related taxes – the Fondo de Estabilización para el Fomento Económico (FEFE) and the Contribución al Transporte (CONTRANS) – initially for three months, which he said would cost the state US$11.52m and US$13.04m respectively.

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