6
/ Wednesday, July 20, 2022
Drop in the price of gas not enough to increase sales AT THE PUMP Retailers say spiraling inflation is to blame
D
Efraín Montalbán Ríos, The Weekly Journal
espite the stabilization of the price of the oil barrel and the temporary repealing of “la crudita” (the fuel tax), an increase in gas consumption in Puerto Rico is not anticipated due to the inflationary effect, according to the president of the Gas Retailers Association (ADG, for its Spanish acronym), Esdras Vélez. According to Vélez, the gasoline market is in a state of “self-regulation,” in terms of the international price of oil, so it is estimated the price of crude oil will drop to about $70 by the end of Committee of the United Retailers Center the year. However, although this is good news for (CUD), Carlos Crespo, argued the decrease in the consumer, Vélez anticipated there will be no consumption is not new to the island. Up until a increase in consumption until the inflation rate few years ago, more than a billion gallons of gas drops. were being sold but, after the Covid-19 pandemic, “There has been a decrease in the sale of fuel at estimates put that figure at 800 million gallons. the stations and, taking into consideration that [the “We have seen –since the pandemic began– that price of] everything is increasing, it will influence gasoline consumption has decreased dramatically, [fuel] consumption. Everything has increased in this but when the price of gasoline began to rise in economy and there is less money available to buy December, and after the war between Russia and products. For me, this is going to continue. For the Ukraine –when the price shot up almost 50% – sale of fuel to increase, there must be a decrease in people continue to spend the same amount of inflation”, emphasized the ADG president. money, but they receive less gasoline,” said Crespo. For economist Leslie Héctor Román Maldonado, Adames, the decrease in the director of the Economic price of fuel continues to be Studies Division of the insufficient to promote a rise in Department of Consumer consumption. Affairs (DACO, for its Spanish “With the increase in prices acronym), reported that the in this economy – without agency does not have updated The average Puerto salary increases that could statistics on consumption Rican can now compensate for the loss in patterns at gas stations on the buy 1,260 liters of purchasing power due to island. An order has been issued gasoline with the inflation– the consumer finds for retailers to document this average salary, himself in a position of a fixed information daily. which are 1,004 liters salary to cover his needs,” A report from Picodi.com, a less than a year ago. Adames said. firm specializing in studies based According to the economist, on consumption, confirmed the the growth of annual gasoline decline in gas consumption on consumption has reflected a the island. The study shows that slowdown since June 2021, when it increased 25%. the average Puerto Rican can now buy 1,260 liters Since then, sales have decrease until last May, of gasoline with the average salary, which are 1,004 when it reached 2.9%. liters less than a year ago. “We came from a peak growth of 25% per year in The study also showed that the price of fuel in June 2021, to an increase in gasoline consumption Puerto Rico ranks eighth among the 21 countries of 2.9% per year for May 2022. Growth has been included in the investigation, with an increase of slowing down,” said Adames. 48.7% higher than the cost of January, which Vélez Meanwhile, the president of the Gas Stations attributed to fuel taxes and the increase in the
In fact,
DACO inspectors visit a gas station in San Juan. >FILE: Brandon Cruz González / EL VOCERO
The only way to pay less, when compared to other countries, has to do with taxes and importers. That’s the combination… Esdras Vélez, president of the Gas Retailers Association
transportation of fuel to the island. “The only way to pay less, when compared to other countries, has to do with taxes and importers. That’s the combination… we receive that bill and we pass it on [to the consumers]”, indicated the retailer. In the meantime, Román Maldonado assured that the increase in the price per liter of gas has remained below international increases because profit margins have been imposed on the retailers and because of the repealing of “la crudita.” “We are looking at two things here: a freezing order [on profit margin] and “la crudita”. Since the freezing order is in place, if the international market [price] drops, it will be reflected in Puerto Rico. In the same way, the 16 cents per gallon from “la crudita” will also be reflected,” the Secretary explained. Román Maldonado calculated the average price of gas on the island —from January to June 2022— and it showed a 51.92% increase for regular, and a 49.41% for premium. The greatest increase was diesel fuel, with a 75.3% increment.
