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Haiti - Economy : The Government is no longer able to pay its debts to oil companies
31/05/2019 09:02:34

Haiti - Economy : The Government is no longer able to pay its debts to oil companies
A report from the Directorate of Tax Inspection at the Ministry of Economy and Finance underlines the Haitian State's inability to repay the oil companies and the delicate situation that awaits Haiti in the coming weeks.

Faced with this situation, the report indicates that the State will have no other solution than to act on the price of petroleum products (reduction of the subsidy at the pump) to prevent a situation of scarcity and the increase of the deficit which amounts to several thousand gourdes due to the shortfall.

In this report, the Tax Inspectorate said that as of May 20, 2019, the price per gallon of gasoline in Haiti remained lower than that of the region. While in Haiti the gallon of gasoline is sold for US $ 2.48 and that of diesel US $ 1.98, the same fuel is sold in the Dominican Republic respectively US $ 4.72 and US $ 3.64, in Trinidad and Tobago (oil-producing country) gasoline sells it US $ 1.98 and diesel US $ 3.22.

The report states that the State repaid the local oil companies a debt of $14.7 billion as of April 31 (the companies providing the subsidy before being reimbursed). However, from April 31 to May 10, 2019, a new debt already amounts 8.7 billion gourdes, an amount that the Haitian State must repay to allow the importation of gasoline on the local market https://www.haitilibre.com/en/news-27779-haiti-flash-imports-of-petroleum-products-new-endangered-in-the-country.html

"The government is no longer able to pay its debts. Nor is it able to subsidize fuel prices at the pump, because of the shortfall resulting from the non-collection of taxes" says the report https://www.haitilibre.com/en/news-27779-haiti-flash-imports-of-petroleum-products-new-endangered-in-the-country.html

It should be noted that as fuel increases in the international market, Haiti sinks into the deficit, since prices at the pump remain unchanged. A deficit that could exceed 700 million US dollars this year (more than 64.4 billion Gourdes at the rate of 92 Gourdes for 1 dollar).

Moreover, the continued devaluation of the national currency contributes to aggravating this delicate situation. Fuels are sold on the local market in Gourdes whereas orders for petroleum products are made in US dollars, so even when the price of fuel remains stable on the international market, the devaluation of the Gourde increases losses for the Haitian State...

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