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State Subsidies Down $244.2 Million


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State subsidies down $244.2 million

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Falling oil prices vut transport subsidies

PANAMA’S government subsidies fell   in 2016  by 15.1%  or $244.2 million to  $1.375.6 billion  largely due to falling energy prices.

The level of subsidies granted last year is similar to 2013, when $1.333 billion  were disbursed.

The reduction in relation to the last two years is explained by the adjustments made to the policies of the subsidy, favored in part by lower energy costs  The amount paid in 2016 for electric subsidies was $32.4 million, which is a reduction of 81.5% or $142.6 million dollars compared to the expense of the previous year.

This result contributed to the elimination in July 2015 of the Energy Compensation Fund (FACE), a subsidy created in the last administration that covered part of the tariff to all the clients.

In 2015, the Government allocated $ 125 million to this subsidy. Last year, zero, reports La Prensa.

Deputy Economy Minister Ivan Zarak said the FACE “was a tariff freeze. “They wanted to freeze it and the bill came to be $400 million. What we did was to eliminate FACE and adjust the rates. It was not a very popular move, but it had to be done. “

 

http://www.newsroompanama.com/news/panama/state-subsidies-244-2-million

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