Sunday, January 25, 2009

Fuel Expenditures Rose while Imports Dropped

In the month of November 2008, the amount paid by Guatemala for fuels was 28.9 percent higher than the same period in 2007 even though the amount of fuel imported was lower.

According to the Directorate General of Hydrocarbons, Ministry of Energy and Mines, as of November 30th, expenditures for petroleum amounted to U.S. $2.574 billion, $574 million more than in the same period from 2007. At the same time, Guatemala imported 24.17 million barrels, 2.85 million barrels less than in the same period of 2007 when it bought 27.02 million barrels.

Augusto César Corado, director of the Directorate General of Hydrocarbons, said the reason for the cost increase was that the oil was unfortunately purchased during the time of peak prices.

According to Carmen Urizar, an expert in the field and former Minister of Energy, this year presents major challenges for the government because the cost for imported oil in 2008 nearly tripled over the amount budgeted. He added that this trend should prompt the government to step up the search for alternative sources of energy such as biofuels.

Expenditures for imported oil has risen in recent years by about 63 percent since November 2004, when the amount was U.S. $947 million. In November 2008, the expenditure was U.S. $ 2.574 billion.

According to recent projections by the Economic Commission for Latin America and the Caribbean (ECLAC), by the close of 2008 the American oil bill increase by 42.8 percent, year over year. The commission's analysis showed the expenditure will beU.S. $12.25 billion. The figure was U.S. $8.642 billion in the previous year.

Thomas Dougherty, president of the Chamber of Industry of Guatemala, believes that more thought should be given to the use of alternative fuels.

The state must respond in an emergency manner because of the economic debacle that occurred during the highly volatile period in the oil markets. Analysts and government officials hope that the worldwide economic slowdown keeps oil prices lower due to decreased demand.