El Salvador: Advantage Taken of Falling Oil Price

The Government is debating whether to charge an additional tax of 1% on the price of fuel when the international price falls below $50 per barrel.

Wednesday, January 7, 2015

Under the law passed in 2009, if the price of a barrel of oil is less than $50 an additional 1% tax on the price of fuel will be automatically applied. Although the international price of oil is now trading at less than $50, the tax is not yet being charged.

Nelson Carrillo, Chief of the Regulatory Market Analysis Division of the Ministry of Economy, told Elsalvador.com that "... The tax comes into effect initially when the price drops to $70 per barrel and states that between $70 and $50 there will be a charge of 0.5% tax on fuel prices and a charge of 1% when it is below $50. The application of this tax will be applied on sales that various gas stations make, the Ministry will visit the stations and using this methodology (established in law) will start the calculation process. "

"... For the service station industry, low price is a key factor in the growth of sales. Since 2008, service stations had experienced a drop in fuel consumption, with a low sales growth that has not exceeded 1%. But after the fall of prices, entrepreneurs have a new hope of receiving 5% growth in sales. "



More on this topic

Gas Stations: Business Upwards

March 2019

According to businessmen of the sector, the constant growth of the vehicle fleet explains the investments that have been made in the opening of new service stations in El Salvador.

At the beginning of 2019, there were 455 service stations in operation in the Salvadoran market, according to data from the Hydrocarbons and Mines Directorate of the Ministry of Economy.

Central America: Fuel Prices up to June 4

June 2018

Price of a gallon of regular gasoline: Costa Rica $4.22, Nicaragua $3.99, Honduras $3.83, El Salvador $3.62, Guatemala $3.60 and Panama $3.33.

From a report by the Ministry of Economy of El Salvador:

-Geopolitical events that took place in the month of May between the United States and Iran, led to an increase in the prices of petroleum products, which has been felt in the global market, due to the economic sanctions that focus on reducing the supply of exports to the international hydrocarbons market.

Guatemala: More Taxes on Gasoline?

January 2015

Taking advantage of the low price of oil the government is discussing increasing the tax base on the distribution of petroleum and petroleum products.

The proposal seeks to raise the fuel tax which is currently around $0.60 for gasoline and $0.17 for diesel. Moreover, the measure would also provide an increase in the rate for petroleum products such as kerosene, naphtha and liquefied petroleum gas.

Tax Increase for Gas Stations

March 2012

The government of El Salvador is studying a proposal to change taxes for owners of gas stations, in light of the sector’s negative reaction to the latest tax reforms.

The current proposal is to exempt them from the tax of 1% of total sales tax in exchange for paying 30% of profits.

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