Archive for the ‘propane gas subsidy in El Salvador’ Tag

Propane Gas Controversy in El Salvador / La Polemica de Gas Propano en El Salvador   1 comment

One of the current administration’s biggest gaffes was changing the propane gas subsidy. “Propane Gas?” you might ask, thinking of your backyard barbecue grill.

Photo by Víctor Peña at La Prensa Grafica

Propane Gas tanks are how most Salvadorans power their stoves and ovens.  It’s also how anyone that runs a food service business heats up anything that is cooked.  In short, it’s a utility.  And for years now, in El Salvador, propane gas has been subsidized to protect the consumer from high costs.

The subsidy, in its previous form, blanketed everybody:  rich, poor and in between.  The subsidy was paid directly to the propane gas distributors, who would sell the gas tanks at the subsidized price to everyone in the populace.

Then someone in the government had an idea – why don’t we find a way to take the subsidy away from the rich or well off, since they don’t need it, and give it only to those who do?

Thus, the subsidy process was changed, and as of April 2011 it is now tied to your electric bill.   It is given only to those who use less than a specific number of Kilowatts (showing as 300 KW on our most recent bill).  Usually, a poor person in El Salvador with a smaller house and less appliances uses less than that KW threshold.

“Subsidio del Gas:  Justo para las grandes mayorias” is their slogan (The Gas Subsidy:  Just for the Great Majority).

In theory, it sounds like the perfect plan.  In practice, it turned into a disaster for many people.

The price of propane gas went up for a lot of people unexpectedly, and as a result the price of many other things went up along with it:  pupusas, tortillas, and fresh baked bread, to name a few.   For example, tortillas went up by 20%:  previously 20 for a dollar, now reduced to 16.   Propane gas for a 25 pound tank was about $5.25 before the change; now a tank is $15.30, the cost after the $9.10 subsidy $6.20.

Why are so many people not getting the subsidy now?   One Reason:  COMMUNITY ELECTRICITY.   It is common for multiple families living in one or more dwellings on the same property to be sharing the same electric meter.  Use of a common electric meter has helped Salvadorans historically, by not having to pay the up front fee to install separate service and an additional meter, and probably helps by sharing the minimum delivery charge.   But all that cost-savings has just gone out the window.  If 2 families share a meter and bill, only 1 gets the subsidy.

There IS a solution, supposedly, for families living on the same meter to continue receiving the subsidy.  They are to visit their closest CENADE, a government organization.   CENADE can send a representative to visit the house/homes using a common meter and verify that separate families live there, so each can receive the subsidy.  According to my husband, people in the neighborhood he grew up in have done that with success.

Another Reason the new subsidy process is failing the poor:    the subsidy only goes towards one “tambo” or tank of gas per month.   Families who use more than one tank a month only get help on one.  And small businesses who do not qualify for the electric subsidy, or who use multiple tanks of gas are in the same boat.

The gas subsidy changed even pissed off the distributors, who even went on strike for a couple of days recently, complaining that their profit margins have been cut, as the price of propane has increased but they are required to sell it at a fixed price.

My husband and I receive the subsidy each month, and we use one tank every 2-3 months, so we’re actually better off than we were before.  We decided to put the money in an envelope and buy something or give the money to my mother in law, who IS poor and needs the subsidy, every few months.

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