By Pablo Barrera / Image by Pixabay

GUATEMALA | The Government of Guatemala, led by President Bernardo Arévalo, has presented a bill to implement a temporary subsidy for fuels and propane gas. This measure is a direct response to the instability of the international oil market, affected by geopolitical tensions in the Middle East that impact transportation costs and the basic food basket.

How much will Guatemalans save?

The support program includes different amounts for the most consumed products:

• Diesel: This category receives the most support (Q10 per gallon), given its direct impact on freight and passenger transport.
• Gasoline: Both Superior and Regular will receive a discount of Q5 per gallon.
• Propane Gas: The 25-pound cylinder, essential for households, will have a Q20 subsidy.

Impact on the Wallet and the Economy

With this measure, the price of diesel could stabilize near Q31.39, while gasoline prices would hover around Q33.00 and Q34.00. According to the Executive branch, the main focus is on diesel to prevent a price hike in food and basic services.

Financing Without Additional Debt

A key aspect of this proposal is that it will be funded through a budget reallocation. Deputy Minister Patricia Joachín confirmed that cash balances from the Ministry of Finance, totaling more than Q6 billion, will be used, thus avoiding the need to expand the general budget or acquire new debt.

The Debate in Congress

Although the measure seeks immediate relief, the Congress of the Republic maintains an active debate. Some sectors propose alternative solutions, such as the temporary suspension of the Oil Distribution Tax (IDP), while others emphasize the need to ensure that the benefit reaches the final consumer in full without getting stuck in the distribution chain.