“The owner of a Ferrari can perfectly pay $6 or more”: economist on generalized fuel subsidy

The economist and former president of the Central Reserve Bank (BCR), Carlos Acevedo, spoke on the morning of this Tuesday, May 31, in the television interview of Diálogo with Ernesto López about the measure that the government has implemented to subsidize fuels as a measure to alleviate global inflation.

The economist assured that, although it is true that it is a beneficial measure for salvadorans, it should be focused, because there are thousands of salvadorans who can pay the price of fuel in the market.

“Here in El Salvador thousands of cars circulate whose owners I am sure have the capacity to pay 6 dollars or more,” Acevedo said.

Currently the price of superior gasoline is between $6.00 and $6.05 and due to the subsidy given by the government, its price is set at $4.31 in the central and western zones and at $4.32 in the eastern zone of the country.

“I give a very crude example, I am the owner of a Ferrari and I go to the gas station to get subsidized gasoline, the owner of a Ferrari can perfectly pay $6 or more. I am the owner of a 4×4 of 60 thousand dollars of Diesel and I am going to put into the gas station with subsidized diesel,” said the economist.

“Then establish the general fuel subsidy for tens of thousands of drivers who have the economic capacity to pay the market price and, on the other hand, the population with the lowest incomes do not have a vehicle, they use public transport,” he added.

Last Wednesday, May 25, the Legislative Assembly approved an extension to the special law to set fuel prices in Salvadoran territory, which would expire on May 31.

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In addition, they extended the suspension of the collection of the Special Contribution for the Stabilization of Public Transport Service Rates (COTRANS) and the Temporary Suspension Regime for the Application of the Charge Related to the Special Stabilization and Economic Development Account (FEFE).

The extension of this measure will last three more months, that is, until next August 31.

“The problem here, according to the finance minister, is costing the country, the treasury, 50 million dollars per month to support these measures, a greater focus would be desirable on this,” Acevedo said.

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