Why is the collapse of crude oil prices on international markets “a blessing” for Ortega’s businesses and “punishment” for households?
The steep drop in the price of oil on international markets due to the global expansion of the coronavirus, will allow the Daniel Ortega regime to pay old debts that the Nicaraguan Electricity Institute (INE) has with Alba-Caruna, which until 2016 amounted to US$114.3 million dollars, the last time the payments that had been made since 2010 were publicly reported. The status of this debt was never been heard from again.
Electrical engineer Fernando Bárcenas, pointed out to La Prensa that with the steep drop in oil – which closed yesterday at less than US$27 a barrel – a drop in the Nicaraguan electricity rate could be applied, but he recalled that Ortega in late 2016 created a mechanism that snatched from households that possibility, to drop electricity rates, one of the most expensive in Central America.
“No reduction will be applied, neither in the March specifications, nor in April, nor in the rest of the months, because two years ago they threw out a law where they said there will never be a discount, that in the event there is a drop in the price of oil it will be transferred to the payment of the financing that there was between 2010-2014,” explained Bárcenas.
The electrical engineer refers to Law 943, Law to Reform Law 898, Law of Variation of the Electricity Rate to the Consumer, which establishes that “the amount that results from the difference between the average price of sale to the consumer and the real price of sale to the consumer, that constitutes saving in the tariff of electrical energy, will be destined to the payment of the total debt of the electrical sector ”. This law came into effect in 2017, but was approved in December 2016. (See infographic)
Read the full report (in Spanish) at La Prensa.