Dominican Republic halts US$52M tax break on fuels, as strike looms

Santo Domingo.- The government of theDominican Republic on Thursday eliminated the monthly fuel subsidy provided to ownersof buses and trucks since 2011, a measure expected to spur reprisal and higherfares.

In total the passenger and freight transportsector gets 3.8 million gallons of subsidized fuel, a tax break of RD$2.4billion (US$52 million) a year, to avert increases in fares.

Industry and Commerce minister TemistoclesMontas last night said the government doesn’t plan to resume the subsidy, providedthrough the program Bonogas. "Almost half of the subsidy was used forother purposes, distorting the market and not as it was designed for," Montassaid.

As expected, the measure drew threats of higherurban and interurban fares from the major transport groups, which announced avisit to Industry and Commerce Friday to express their opposition.

Last week transport sector leaders toldnewspaper El Dia that they haven’t been receiving the subsidy since September 7and threatened halt passenger and cargo service, as well as increased fares andrates.