LatinNews Daily - 25 August 2022

In brief: Panama extends energy subsidies

*Panama’s government led by President Laurentino Cortizo has extended until 30 September a temporary scheme which provides additional support to the tariff stabilisation fund (FET), established in 2004, which is targeted at low-energy users and intended to cushion tariffs against movements in international oil prices. An extension to the FET (the FET Covid-19 scheme) was introduced by the government in 2020 to mitigate the impact of the coronavirus (Covid-19) pandemic. Economy & Finance Minister Héctor Alexander said that the latest extension would benefit 1.14m clients or 92% of service users. The discount represents savings of between 30% and 48% for consumers depending on their energy usage. According to the government, since the FET Covid-19 scheme was adopted in 2020, it has cost the State US$150m as of 30 July with the extension up to 30 September costing an additional US$12m. The announcement comes as the government and protest groups are currently holding negotiations as part of efforts to end what became the biggest protests to rock the country in recent years over soaring living costs. Inflation was running at 3.5% in July in annual terms (high for Panama which has historically had low inflation due to its dollarised economy).

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