Monday, December 03, 2007

Gas tax to subsidize transport owners

The surging price of gasoline and diesel fuel on world markets put a financial squeeze on the owners of El Salvador's buses. With the government unwilling to authorize fare increases, the bus owners threatened a nationwide stoppage. That action was averted when the government agreed to negotiate with the transport companies. What resulted was an increase in the subsidy the government pays to keep fare prices low.

The government's decision on how to pay for that subsidy, however, has been widely unpopular in El Salvador. The subsidy will be funded with a 10 cents per gallon gasoline tax. The critics contend that this tax will hurt not only those who own cars, but also the entire society as the increased cost for fuel gets passed on to consumers in the prices of basic items in the household budget.

While it is true that a gasoline tax tends to be regressive (it represents a greater percentage of the income of low income individuals), the real problem facing El Salvador is that it is at the mercy of world oil markets and the falling value of the US dollar. Looking for ways to reduce El Salvador's dependence on oil isn't part of the national debate in the country yet.

8 comments:

inner-self said...

come on tim, your getting behind on your posts. this news is about two weeks old and pretty much everything about it has already been said, but perhaps not done. anywho, we shall all agree on this one, it's absurd. the high prices of fuels is unpopular with everyone world wide, why on earth go ahead and make it more expensive for a small group of people who happen to own vehicles. i mean, why not tax things that are not fuels, it'd be the same tax, but psychologically it would not make the price of gasoline seem higher. i know people of the fmln will say a lot of BS about my comment, but i'm just saying, gas is already expensive, don't make it more than what it already is.

HODAD26 said...

and they still let those old clunkers run, never adjust the valves(diesel every 10k miles]
when there are more efficient buses like the Brazilian ones
and again
HEMP cultivation needs to start NOW!
especially in ES read the facts Jack
i believe Mr Funes is quite intelligent and will allow commercial hemp production, the only savior for countries that have no oil resources
no pesticides,herbicides, and not much fertilizer to ruin run off in the ecosystem
wake up 'sheeples'

Anonymous said...

well im not part of the fmln , but i consider your coment inner self quite stupid, with all your pardon, because, its time to go look for other sorces of fuel, hello and ES is a good to produce sugar cane beside a saw TONY SACA in the internet in a photo with supously producing green fuel in ES nothing has sence , at all, look in the internet and then why is this not being provide to the PEOPLE and the public transportation after all the president that s why they are for right and please stop that dependency of USA, is anyone ask if ES is following the steps of PUERTO RICO wich by the way is 20 year later that USA owned it each year gone poorest.

inner-self said...

i agree with the ethanol not being sold locally, but remember, it's private enterprise and they export it to industrilized countries so they don't pollute their atmosphere as much. i surely wish el salvador was the next puerto rico; more talent, more money, and guess what? automatic US citizenship, that's what we all illegal immigrants in this country want more than anything. but of course, it would not happen, el salvador would flat out empty out and all people end up here in the USA, perhaps only the dumb and crack heads would remain in el salvador....ha ha ha, so funny, i crack myself up sometimes...

Anonymous said...

Inner-self, are you aware that Puerto Rico became a U.S. colony because of the Spanish American war? That is was militarily occupied? That some Puerto Ricans want independence? Others want statehood; b/c while Puerto Ricans are U.S. citizens some would like to be a full-fledged state. Did you know that in the 1940s-1960s many Puerto Ricans emigrated from the island to the mainland because there was little economic opportunity? When they came here they faced a lot of discrimination and racism b/c of their race. I don't think only the "dumb" and "crackheads" would remain in El Salvador is it were a U.S. state. I think your posting reflects a real lack of understanding.

Anonymous said...

Pass a law that bans all old buses from circulation (any bus more than 8yrs old), offer to purchase the "remaining" buses at a low-cost, nationalize the public transportation system, restructurize the whole system, remove from assembly all those "bus empresarios", run nation-wide campaigns promoting the use of public transportation and car-pooling. This is the kind of stuff that should've been done long, long, long ago. And can still be done, but chances of this happening is slim to none, at least with ARENA at the helm of a boat (the country) that is more and more looking like a viking funeral pyre.

Anonymous said...

how much would it cost to build an electric, moderate, decent metro rail system? at least for the san salvador metropolitan area?

SalvaAlchemist said...

inner-self Ive read a number of your posts but the last one you've made stamps you as an idiot. I'm American born and I would never want ES to become another Puerto Rico. 40% of the island still lives in poverty and many native Ricans also resent their American counter parts. Furthermore, the boricua pop. in the states are less educated and poorer than even other non citizen Latinos. What benefits are they reaping from being citizens? Puerto Rico is not what you think is. I cant tell if thats sarcasm, but if it is I apologize.

I agree with the previous post about privatizing the transportation but it wont happen with ARENA. I would even go as far as suggesting to build a rail line. The FLMN I bet would also not do it b/c their friend Chavez would lend them a hand with the petrol.