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.

Omar Franco, Superintendent of Tax Administration, told Prensalibre.com that "... The move is in response to the low price of a barrel of oil internationally, which has impacted heavily on tax revenues from VAT in respect to final consumption and the change in the exchange rate. "

"... The taxable portion which applies to tax per gallon of gas is being analyzed, because the price is between $2.61, whereas in the last quarter of 2013 it was $4.71. That means the SAT collected VAT of $0.50 per gallon of gasoline when the pump price was $4.71. Now, with a cost of a gallon of super at $2.76, it collects $0.24. "

Source: prensalibre.com

More on this topic

El Salvador: Advantage Taken of Falling Oil Price

January 2015

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.

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.

Fuel Prices up to September 16, 2014

September 2014

Prices of a gallon of regular gas: $3.90 Panama, $4.00 El Salvador, $4.01 Guatemala, $4.56 Honduras, $4.71 Nicaragua, $5.22 Costa Rica.

From a statement issued by the Ministry of Economy of El Salvador:

The Ministry of Finance announced this September 15th, the new changes in reference prices for fuel, which will be in force from 16 to September 29, 2014.

Fuel Prices in Central America - August 2014

August 2014

Gallon of regular gasoline: Costa Rica $5.44, Nicaragua $4.78, Honduras $4.71, Guatemala $4.37, El Salvador $4.51 .

From a statement by Ministry of Economy of El Salvador:

The Ministry of Economy announces this August 4, the new variations in prices reference for fuel, which will be in force from 5th to 18th of August 2014.

Fuel Prices in Central America

July 2014

Prices for a gallon of regular gas: $5.46 Costa Rica, $4.99 Nicaragua, $4.81 Honduras, $4.36 Guatemala, $4.24 El Salvador.

From a statement issued by the Ministry of Economy in El Salvador:

The Ministry of Finance announced this July 21, new variations on the reference prices for fuel, which will be effective from 22 July to 4 August 2014.