Senate committee hears testimony on gas prices
By John McPhaul
The Department of Consumer Affairs (DACO by its Spanish acronym) does not have enough tools to regulate gasoline wholesalers, Senate Government Committee Chairman Ramón Ruiz Nieves said Monday.
“DACO has two things in its hands: number one, to give you receipt this afternoon of the reports, evaluate its regulations and determine if then we amend regulation number 45 or amend the existing law, with the Supply Law, to give greater tools to DACO in order to protect the consumer,” said Ruiz Nieves to questions from the press.
The senator said it is the gasoline wholesalers who establish the distribution price.
“But the distribution chain in Puerto Rico, understood as gasoline wholesalers, sets the price according to the competition,” he added.
“The regulation leaves open the question that, then, they are the ones who discuss the price in the market,” Ruiz Nieves added. “In other words, if I have three [gas] stations, the three stations sit down and discuss their price.”
During the public hearing process in the morning, Ruiz Nieves questioned DACO Secretary Edan Rivera Rodríguez about the possibility of determining for how long the consumer has paid more: about 11 cents more for a gallon for gasoline.
“One of the things that we ask DACO is the question of whether it can say the real amount of [a price increase], if the matter occurred or if the matter of price reduction of that five percent preceded it,” the senator said. “We’re talking about the consumer being charged an extra 11 cents per gallon.”
“How many gallons of gasoline were distributed in Puerto Rico at that price? How much should that adjustment have been? It is one of the things we are asking of DACO,” he added. “And really, what power does DACO have regarding fuel storage in Puerto Rico? Because it is very easy, the wholesaler brings the fuel, brings it to the warehouse, but DACO does not have a regulation because DACO’s function comes into play in the distribution chain, which is through the retailer.”
Rivera Rodríguez said DACO has requested explanations since last Wednesday from gasoline importers Sol de Puerto Rico, Total, Puma, Peerless and Best Petroleum after a monitoring of the agency compared the price information they submitted with data from the market that the department uses as a reference.
Ruiz Nieves held a public hearing of the Government Committee, which presides over the organization and proper functioning of the agencies, departments, offices and entities of the central government, which are under the committee’s jurisdiction. In Monday’s hearing, the senator discussed the price of gasoline before the appearance of the officials from DACO and the Department of Justice.
At the end of the public hearing, Ruiz Nieves said he has summoned officials from the Treasury Department and the Department of Justice to appear Friday, when he said he would question them as to whether, in effect, the tax is paid once the product arrives in Puerto Rico for storage.