Guatemala's Fuel Subsidies May End in July Without Extension Plan

Guatemalan consumers may face higher fuel prices in July as state subsidies for diesel and gasoline are set to expire. The current support, offering Q8 per gallon of diesel and Q5 per gallon of gasoline, is running out of funds. Congress members on the Finance Commission noted that the subsidy's allocated budget of Q2 billion is nearing depletion.

According to the law, the emergency coverage ends on July 31 or when the budget is exhausted. However, no official proposal to extend the support was presented in Congress. The Minister of Energy and Mines, Víctor Hugo Ventura Ruiz, expressed hope that an extension would not be necessary, mentioning that options for targeted subsidies are under review, though no official plan has emerged.

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The subsidy generated more consumption and the prices recovered the demand. There was faster consumption. There is no drop in demand due to prices and it was more resistant. There is no space nor proposal from the Executive and there is also no technical proposal.

Congressman Julio Héctor Estrada Domínguez, president of the Finance Commission, stated that the subsidy increased consumption, and fuel prices recovered demand. He noted that there is no official proposal from the executive branch or a technical plan for an extension. Estrada indicated that the Ministry of Energy and Mines is working on a targeted subsidy proposal. He warned that consumers should prepare for price adjustments in early July if no exceptional measures, like extending the current subsidy, are taken. The decision on any extension will depend on actions presented by the executive branch in the coming days.

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The safe thing is that (consumers) will face a price hike in early July. We are waiting to see if a proposal and action will be presented, because the Plenary would have to be convened urgently before the end of the month.