Antonio Paneque Brizuela
Journalist for the South American editorial board of Prensa Latina
Here very popular sayings of “neverending stories”, “from the good whistle” or “rag-legged cat” now pale before the ebb and flow of fuel due to funds approved and denied by the Executive Branch and Congress time and time again.
The latest ups and downs came on April 11, when lawmakers rescinded a fuel-price cut subsidy approved by President Mario Abdo Benítez on March 25 and also rejected another $100 million.
The annulment of the text of the law was approved by the two chambers of the National Congress (deputies and senators) that day and by the President the next, apparently under pressure from dissatisfaction.
But the strangest thing is that these highest authorities have previously defended the budgets to the point of exhaustion to alleviate the situation, through meetings that have been cited and repeated, frustrated and some of them celebrated.
The Senate even went so far as to give its positive vote on April 5, which was half the standard, on the $100 million budget called the Fuel Price Stabilization Fund.
To get to this point, however, the Chamber of Deputies and the Senate first ran through other “never-ending stories”, too often convening and suspending their meetings and contacts on the subject.
Sessions postponed “due to lack of quorum”, postponed due to indiscipline due to a “early summons” or decisions inconsistent with those of other sessions, caused great confusion in public opinion.
The President’s decision to lower the prices of the state-owned Petróleos de Paraguay (Petropar) through Law 6900/2022 was a kind of relief from two weeks of roadblocks by transport companies opposed to these tariffs.
Notably, the realignment of prices by this regulation reduced a liter of Type III diesel to 6,050 guaranís (93 cents per dollar) and 93 octane gasoline to 6,910 guaranís (99 cents per dollar).
PRICES, PROTESTS, INFLATION
The March demonstrations, with closures and blockades of strategic highways across the country and ongoing even in the capital, prevented the movement of travelers and supplies and generally isolated the country.
The law of March 25 came a month after another decision, which also meant the opposite at the time: increasing fuel prices on February 26 for the second time this year and for the sixth time in the last 12 months.
This provision, motivated by the global economic crisis caused by the war in Ukraine, was adopted after meetings with representatives of both sectors, who increased the liter of their products by about 500 guaranís ($0.07).
Domestic fuel prices, later joined by Petropar, rose along with those for groceries and other essential items amid annual (March-March) inflation of 10.1 percent.
For its part, the law enacted by Abdo Benítez authorized the state-owned company’s stations to sell and directly import Type III diesel and 93-octane naphtha at prices lower than the invested prices.
These subsidies, which are overseen by the Treasury Department, only supported the 228 Petropar stations compared to the 2,300 private ones, which suppliers and network operators in the industry say are “limited”.
Inequality between individuals and state governments increased on March 28, when the former increased a liter of diesel by 1,500 guaranís (21 cents per dollar) and gasoline by 1,000 guaranís (14 cents per dollar).
The crisis deepened on March 5 when the government ordered a fresh increase on some of the items that were not subsidized at state service stations.
THE SUBSIDIES, “SEMI-SOLUTION”, AFTER THE AGENT
In the midst of these difficult circumstances, it was logical that some sections of the population viewed at least the President’s promulgation of Law 6900/2022 on subsidies for lower prices with some optimism.
But the new regulation of state fuel protection aimed too directly at the citizens’ coffers by considering amortization of their finances through taxes controlled by the Ministry of Finance.
“The fuel price subsidies that the authorities are debating whether to allow are half-solutions,” said Sebastián García, MP for the humanist Partido Patria Querida (PPQ).
In his opinion, the government and lawmakers should “find other alternatives that really benefit truckers and drivers of passengers, cargo and other platforms.”
Immersed in the usual friction and diatribes between political groups on the subject, García was one of the MPs awaiting several absences from his bench to the frequent legislative conclaves to now discuss who knows what.
The MP revealed another strategic aspect of the controversy, qualifying the taxes to recoup the 100 million intended for subsidies “of a margin of income whose debts will eventually be paid by the citizens”.
He began questioning his party and other formations within the legislature about the ruling Colorado Party’s (PC) strong interest in defending the subsidy to avoid problems.
Legislators and media outlets such as ABC Color newspaper went further, criticizing “Chartist hypocrisy” and referring to the Honor Colorado movement within the PC, led by former President Horacio Cartes.
The newspaper alluded to this formation’s vote in favor of their right to the three million 500,000 a month ($511.05) guarantees provided for gasoline, despite announcing they would not receive them.
“They restored fuel quotas and now they say they are giving up the privilege,” published ABC Color, in words that cast some doubt as to what an MP with such benefits will think when voting on subsidies.
But some hunters of controversial statistics might also ask: How come a small and poor country spends – according to official sources – $46 million a year on fuel for its legislators and state officials?
rmh/apb