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Enero 04, 2005
Gas Prices Rise
One of the worst policy decisions that President Carlos Mesa could have made, took place on New Year's Eve Day. The government indirectly increased the price of gasoline and diesel, as the amount that the government contributed as a subsidy decreased. The "gasolinazo" is such a public relations danger, that many transportistas are taking advantage of, including at the expense of passengers. Definitely it will stir up forces that want to topple Mesa. The government announced the measures to counteract the contraband that is entering the market. However, they deny that the measure has been taken in order to reduce the budget deficit.
Strikes and blockades have been announced in 8 of the 9 national Departments. These strikes not only send a message of discontent, but also jeopardizes the right to work that many count on public transportation.
Likely any independent taxi driver who attempts to work on strike days, will be met with physical attacks, including broken windshields or popped tires.
So far some transport lines have increased their fares. Some as much as 50-75%. Does the fare increase actually reflect how much is needed to make up for the price increase of fuel? Or are some trying to milk the opportunity to increase their fares (which are very very low in the first place) and look the government look bad?
Gasoline prices increased Bs. 0.34 / Liter (gasoline) and Bs. 0.75/Liter (diesel).
1 gallon = 3.8 L
Who knows how many km/liter a taxi or bus gets? Let's say 5 km/liter on the lowside as an estimate. In those 5 km, which is a long way in compacted urban centers like Cochabamba, perhaps the bus driver picks up 10 passengers (again, on the lowside of an estimate), who pay an additional 5 Bs. total (10 passengers x Bs 0.50 increase), which is much higher than the Bs. 0.34 in increase of gasoline. For every liter of gasoline, the driver is making an additional 5 Bs. in relation to the 0.34 Bs. of increased gasoline price.
I can justify a price increase, but many of these drivers are milking the situation. Of course, drivers want to increase their takehome pay to give their families a better standard of living, and this is their chance to use the government as a scapegoat. Some of the vehicles are in bad shape and the extra money can be used to repair the buses and taxis. They've always wanted to raise fares, and this is their chance to do so without any passenger retribution towards them.
In Cochabamba, many bus routes cost 1 Bs. (appoximately 12 US cents). However, a price of 1.50 Bs. was the standard. It wasn't until fierce competition among bus lines that often follow the same route caused the noticeable drop. Other drivers had no choice other than to follow suit.
However, the vast majority of taxis and buses are now operating on natural gas, which was not affected by this price increase. This technology not seen in the United States, is increasing in Bolivia. Cars and buses need to be equipped with special fuel mechansim that powers cars (I'm not very familiar with the process, but I know that some cars can run all day with 5-10 Bs.)
An uncle of mine fills about 6 Bs. worth each day for his day's deliveries.
Yes, this price increase adversely affects the poorest of the poor whose livelihood depends on inexpensive public transportation. However, it appears as if the transportistas are taking advantage of the situation and an excuse to add fuel to the fire (no pun intended) by pushing Mesa's hand.
Posted by eduardo at Enero 4, 2005 12:44 PM
Comments
I just IMed w/ my friend in La Paz. There's shortages there of things like yogurt & coffee, and long, long lines for gas/oil. La Paz, of course, is always in a precarious position, since it relies so heavily on transportation to bring its food/supplies. But she's bit nervous.
I was surprised Mesa made it past New Years. But I'm skeptical of how much longer he'll last.
Posted by: Miguel Centellas at Enero 5, 2005 01:30 AM