El Salvador’s Congress freezes fuel prices

RIO DE JANEIRO, BRAZIL – On April 5, the Legislative Assembly of El Salvador approved a law to freeze fuel prices during April and May, given the rising cost of fuel and the high inflation faced by the country due to the world economic crisis.

“The objective of the regulation is to establish a mechanism with distributors or importers so that the Government assumes the increase in the price of fuels”, informed the legislative body.

The measure was approved with 78 votes of the 84 deputies, so the Transitory Law to Fix Maximum Fuel Prices will freeze prices between April 5 and May 31.

The source indicated that the maximum sales price per gallon (3.8 liters) of special gasoline would be US$4.31 in the country’s center and west zones, while in the eastern zone, it will be US$4.32.

Regular gasoline will cost US$4.15 in the three zones of the country and low sulfur diesel US$4.14, with which “drivers will be able to obtain savings of up to US$0.80 per gallon,” according to the Legislative body.

This measure, the source indicated, “will not apply in service stations or gas stations where full-service prices are established”.

Congress had suspended for 15 days the partial payment of the Value Added Tax (VAT), while for three months, it has paused the collection of the taxes Economic Stabilization Fund (FEFE) and Economic Compensation and Stabilization of the Tariffs of the Public Service of Collective Transportation of Passengers (COTRANS).

The Government expects 1.2 million drivers to benefit from the initiative, including the supply chain, food transportation, and merchandise.

The inter-annual inflation rate in El Salvador stood at approximately 6.7% in February, up from 6.5% in January, according to figures from the Central Reserve Bank (BCR) consulted by Efe.

According to data from the financial institution, the inflation registered in February was 0.79%, and the accumulated in 2022 reached 1.41%.

The Consumer Price Index (CPI) report of the General Directorate of Statistics and Census (Digestyc) for February highlighted increases of 0.97% in beverages and food, 0.81% in daily household maintenance, 2.28% in transportation, and 1.16% in recreation.

With information from EFE