Salvadoran Entrepreneurs Criticize Withdrawal of Electricity Subsidy

Industrialists and entrepreneurs have criticized the abrupt elimination of the electricity subsidy by the government.

Wednesday, March 25, 2009

The Government of El Salvador had committed to a reduction of the subsidy in parts, the last reduction to be made made in October 2009. This benefit applied to consumption of more than 99 Kw/h. However, it was announced yesterday that it would not be able to continue with it, and that the regular rate would be charged beginning this month.

Both the Chamber of Manufacturers and the National Association of Private Enterprise criticized the measure stating, according to what was published in elsalvador.com, that it will generate an increase in costs which will eventually be transferred to the end consumer: "An increase of 7% in the production of the industry ,... the production costs to businesses could be [increased] somewhere between 0 and 5%," and in special cases "... the increased cost would range between 15 to 50%, in the cement industry for example."

More on this topic

Costa Rica: Cost of Electricity Doubles That of U.S.

January 2014

The price paid by Costa Rican industry for electricity consumption is 41% higher than in the European Union and 259% higher than in the U.S.

Industry has expressed its anger against the rising cost of electricity as it is making production more expensive and exports are becoming less competitive against rival markets where energy is cheaper.

Reduced Electricity Bills for Large Consumers

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Overwhelmed by the growing impact of energy costs, large electricity consumers in Costa Rica are asking for a reduction in their electricity rates of between 10.7% and 38.6%.

From a press release by the Regulatory Authority for Public Services (Aresep):

The Costa Rican Association of Large Energy Consumers (ACOGRACE) has requested a rebate for electricity rates in the business sector.

Salvadoran Textile Factories Adjust Costs

April 2009

With the increase in the electricity bill, businesses are looking to cut costs to avoid raising prices.

The president of the Textile Industry, Clothing and Free Trade Zones Chamber in El Salvado (Camtex), José Tobar, explained in an Elmundo.com.sv article that adding the energy increase to prices would mean a loss of competitiveness for the Salvadoran sector when compared to other countries.

Electric bills for business to go up by 38% in El Salvador

July 2008

Business will soon pay 38 percent more for electricity in El Salvador. The private sector is negotiating with the government over the stages in which the increase will be applied as the subsidy is gradually eliminated.

El Salvador President Antonio Saca says the difference between the real cost of energy and the amount the privat sector ccurrently pays has widened due to rising energy costs.

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