Trópigas and Panagas to Suspend Delivery of 25 lb. Tanks

[Keith Woolford]

The two suppliers of propane, butane, or whatever it is, are halting distribution on March 5th of 25 lb. tanks because they’re losing money on them. According to this report, they need an additional 75 cents per tank. 

The real cost of a tank is $12.87 and the government subsidy is $8.50. Distributors earn about 75 cents.

Most likely, this will get worked out before the nation runs out of gas.

 

Edited March 2, 2018 by Keith Woolford

[TwoSailors]

Easy fix. Last time I got my 25# tank filled it only cost $5.00.

In Guatemala, the government gives people the tanks but they still have to pay for the refills.  Consequently, they do not refill them and resort to cutting down the very few trees they have left for firewood.

https://blogs.cofc.edu/envt-200/2017/02/02/deforestation-in-guatemala/

Probably one of the many reasons Panama has a subsidy on the price of the tanks.

[Keith Woolford]

So what’s the easy fix?

Although it seems minor to us, a 75 cent bump reflects an 18% increase to the consumer if it gets passed on.

[JohnF13]

I don't think there is an "easy" fix.  Raising the price  18% for those not making much  will likely result in demonstrations and protests. The easy way out would be for the government to increase the subsidy.  Will they do that?   Well, we  coming into an election cycle. 

[Keith Woolford]

Well, that was over before it even got started.

Gas tank “blackmail” strike called off

Posted on March 2, 2018 in Panama

A STRIKE  set for Monday, March 5 by distributors of 25-pound gas tanks was called off at noon on Friday, March 2, after the Government said it would not submit to blackmail.

According to The National Secretary of Energy, the distributors listened to the Government’s demand to continue providing the service to citizens.

The authorities classified the suspension of the service as a “pressure measure” that “made hostages  of more than a million Panamanians  who use such tanks.”

The product subsidized by the State achieves 926,000 sales every month of the year. It is packaged by the Tropigas and Panagas companies and distributed through24 wholesale companies.

Organized consumer associations issued a statement demanding d “respect for their civil rights”.

http://www.newsroompanama.com/news/panama/gas-tank-blackmail-strike-called-off

 

[Moderator_02]

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$759 million subsidies a gas-tank packer bonanza

Posted on March 3, 2018 in Panama

Post Views: 197

 

The two companies that package the  25-pound gas tanks use in scores of thousands of Panama homes have a growing featherbedded business to which the State has allocated $759 million in subsidies in the last 9 years, assistance that is not focused on Panamanians with least resources.

Calculations indicate that of the one million families that use it, a third really needs the support of the State says a La Prensa report.

The historical distortions that have dominated the sale of  25-pound gas tanks, subsidized by the State, now extend to the field of distribution says  La Prensa.

There are two companies that pack the product: Panagas and Tropigas, whose sales chain s extended to another 24 transport and logistics companies that distribute the cylinders in stores or grocery stores, where consumers pick up and carry.

It is these distribution companies that now demand higher profit margins and they have threatened to suspend delivery unless they are paid more for each cylinder shipped.

Distributors warned that the increase in operating costs, mainly due to the increase in the workforce, affects its profitability.

That’s when they decided to knock on the door of the companies that pack the product to ask for more pay. Tropigas and Panagas said that was impossible because their income would also be affected.

The problem then moved to the State, as the 25-pound tank is subsidized and the price is controlled.

The solution for distributors is for the State to assume, through more subsidies, its operating costs. But the subsidy was not created for that purpose, but to make the gas cheaper for the consumer.

Petroport and Chevron, are the importers of the gas and receive the state subsidy that is then transferred, to the rest of the chain.

Tropigas and Panagas pack the gas into cylinders and the distributors dispatch them to the grocery stores,  where it is available to the end customer.

When the price of gas arriving in Panama increases, what varies upwards is the subsidy and not the price at which consumers buy.

Distributors are demanding that the price increase by  75 cents per cylinder, 18% over the current price.

The actual price of the 25- pound tank is $12.87, but to offer the product at an accessible price the State subsidizes $8.50 and the consumer pays $ 4.37.

The recipe represents a safe bonanza for importing and packaging companies.

 

http://www.newsroompanama.com/news/panama/759-million-subsidies-gas-tank-packer-bonanza

[Moderator_02]

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OPINION: Taxpayers feed gas distributors’ greed

Posted on March 3, 2018 in Panama

Post Views: 129

 

IN ADDITION to the users, the 25-pound gas tank subsidy has made beneficiaries of the packaging companies and their distributor network. The state absorbed their operating costs, which allowed them to reach the consumer at ridiculous prices and get huge profits. Today, the increase in costs -on one side- and price control – on the other – has tightened margins. As a pressure tactic distributors threatened to cut the service. They know that they put the Government against the wall because it is a product of first necessity. Absorbing the rise in the costs of private companies through a bigger subsidy is unacceptable from the point of view of public finances. It is not responsible or just  that, in order to feed economic power and please popular sectors, the Government put more blocks into the heavy backpack of the taxpayers  …  La Prensa Mar.3

 

http://www.newsroompanama.com/news/panama/opinion-taxpayers-feed-gas-distributors-greed