Economist claims fuel price drop was a political decision

Economist Edita Rodríguez explained that the Dominican Government’s decision to reduce gasoline and diesel prices by between RD$3.00 and RD$5.00 per gallon for the week of July 4 to 10, 2026, is a political and fiscal measure intended to cushion the impact on consumers, rather than a reflection of market reality.

Rodríguez suggests that, contrary to what the local decrease might suggest, international prices for refined fuels have experienced significant increases.

Likewise, it highlights that the geopolitical conflict in the Middle East has triggered the “Crack Spread” or refining margin. The diesel margin rose 68% (from US$37.29 to US$62.64 per barrel), while the gasoline margin soared more than 111% (from US$24.67 to US$52.19) in just four months.

“The consumer will pay less, but the cost does not disappear; it is simply transferred to the State,” the analysis explains, noting that these resources come from taxes or public debt.

The magnitude of the local reduction is minimal when compared to external volatility. While international margins grew between 68% and 111%, the reduction at the pumps barely represents between 0.9% and 1.6% of the final price.

However, it is worth noting that keeping the LPG price frozen at RD$137.20 is the measure with the greatest social impact, as it protects the budgets of millions of households and the transportation sector.

However, it adds that this policy increases pressure on public finances.

Although she understands that the measure contributes to containing inflation and protects purchasing power, the economist questions its financial sustainability, due to the use of hundreds of millions of pesos weekly to absorb increases that, by law, should be passed on to the consumer, representing a challenge for the balance of the State’s accounts if international conditions do not improve.