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Subsidies: Support proposals for consumers due to fuel price increases stall in Congress
🇬🇹 Guatemala /Economy & Trade

Subsidies: Support proposals for consumers due to fuel price increases stall in Congress

From Prensa Libre · (2d ago) Spanish Critical tone

Translated from Spanish, summarized and contextualized by DistantNews.

TLDR

  • Proposed support measures for consumers facing rising fuel prices remain stalled in Guatemala's Congress, with divisions among lawmakers hindering progress.
  • Lawmakers are debating two main proposals: a temporary subsidy of Q8 per gallon for diesel and Q4 for gasoline, or the temporary elimination of the petroleum distribution tax (IDP).
  • Geopolitical events are driving up international oil prices, creating a deficit and pressuring global crude prices, which Guatemala imports, raising concerns about further price hikes and potential international crises.

Guatemalan lawmakers are at an impasse regarding measures to alleviate the burden of rising fuel costs on consumers. Despite growing pressure from various sectors, particularly the transportation industry, the Congress of the Republic has yet to advance any proposals aimed at providing temporary support. The weekly agenda of legislative initiatives has seen no related items, and discussions within the bloc leaders' meeting suggest a potential 'pause' due to significant divisions that emerged during plenary debates.

En la reunión de la instancia de jefes de bloque en el Congreso de la República, que conoce la agenda semanal de iniciativas de ley, no se conoció ninguna relacionada con el apoyo temporal a los consumidores; sin embargo, podría existir alguna moción para tratar algún proyecto.

— Article TextDescribing the lack of progress on consumer support measures in Congress.

Two primary proposals are currently on the table. One advocates for a temporary subsidy, offering Q8 per gallon for diesel and Q4 for gasoline over a 60-day period. The alternative suggests the complete elimination of the petroleum distribution tax (IDP) for the current fiscal year. While the subsidy proposal has an allocated budget of Q1.3 billion, funded by cash reserves and other revenue, the elimination of the IDP could impact the state's revenue system, as these taxes are already earmarked for specific purposes. The possibility of eliminating value-added tax (VAT) on these products also remains a consideration.

Algunos diputados consultados indican que el tema podría quedar “en pausa” luego de las divisiones surgidas en la discusión en el Pleno.

— Article TextIndicating the reason for the delay in discussing fuel price support.

Adding to the complexity, recent geopolitical events are significantly impacting international oil prices. A deficit of 7 to 8 million barrels is driving up crude prices, the essential raw material for gasoline and diesel, which Guatemala largely imports from the United States. Lawmakers express concern that further international involvement could escalate into a broader crisis, further pressuring market prices. Despite the widespread discontent, there is a palpable risk that Congress may ultimately fail to approve any supportive measures, leaving consumers vulnerable to continued price increases.

En tanto, crece la presión de diferentes sectores, sobre todo el de transporte, que advierte ajustes en los servicios en los próximos días.

— Article TextHighlighting the increasing pressure from the transport sector due to rising fuel costs.
DistantNews Editorial

Originally published by Prensa Libre in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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