Guatemala spends over Q604 million on fuel subsidies in three weeks

Guatemala has allocated Q604.4 million (approximately $78 million USD) to fuel subsidies over the past three weeks, a significant expenditure aimed at cushioning the impact of rising fuel prices for consumers.

The subsidy program, which began on April 28, offers Q8 per gallon for diesel and Q5 per gallon for gasoline. Data from the Ministry of Energy and Mines (MEM) indicates that Q390.6 million was disbursed in the first two weeks, with an additional Q213.8 million pending payment for the third week as of May 26.

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The amount of this subsidy amounts to Q604 million 445 thousand 092.

Initially, officials had hoped the Q2 billion budget, approved by Congress, would last for three months. However, preliminary projections based on consumption patterns suggest the funds could be depleted much sooner, potentially by early July. Viceminister of Energy and Mines, Erwin Barrios, noted that the current consumption trend might exhaust the budget in approximately 10 weeks from the subsidy's inception.

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According to the consumption behavior of the first two weeks, preliminarily it is foreseen that the total amount of the subsidy approved in Congress could be exhausted before three months, but we must continue to observe the trend of consumption.

The distribution of the subsidy across different fuel types shows that diesel has received the largest share, totaling Q360.7 million for over 45 million gallons. Regular gasoline received Q135.8 million for nearly 27.2 million gallons, while superior gasoline accounted for Q107.8 million for over 21.5 million gallons. Major fuel distributors like Chevron Guatemala Inc. and Uno Fuels Guatemala, S.A. have received substantial portions of the subsidy funds.

Lawmakers are monitoring the situation closely. Julio Héctor Estrada, president of the Finance Commission of Congress, stated that a meeting with MEM authorities is scheduled to review consumption data and import prices. This review will inform decisions on whether to propose an extension or adjustments to the subsidy program, considering the rapid depletion of the allocated budget.

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Based on the projections that MEM provides, we will begin to work on a new proposal to extend the subsidy.