Former Finance Minister Camilo Gonsalves has pushed back against the government’s messaging regarding a sudden 25% spike in gas prices. “You cannot package a 25% increase in gas as a success,” he argued, using a retail analogy to highlight the absurdity of the administration’s stance.
“You can’t tell me if I go into a store that we have a sale… and part of the sale is that everything costs 25% more than it used to cost. That’s not a sale,” Gonsalves remarked.
He stressed that while the government might argue the situation could have been worse, they have fundamentally failed to ease the financial strain on citizens. He pointed out that demanding gratitude for an increased cost of living is out of touch, noting, “You have not eased my current situation because my current situation is now worse than it was before”.
Delving into the economics behind the sudden price jump, Gonsalves attributed the severe 25% leap to a direct miscalculation by the current government. He explained that the administration had abandoned the “three-month rolling average,” a pricing policy previously used to ensure that any fuel cost increases at the pump happened incrementally over time.
Instead of passing on smaller, gradual price bumps, the government artificially held prices down under the assumption that global supply disruptions would be short-lived. This strategy ultimately collapsed when fuel companies, such as Rubis and Sol, informed the government that they could no longer import gas because they were being forced to sell at a loss.
Gonsalves stated, noting that consumers are now paying the price for the earlier abandonment of the rolling average policy. Because the government delayed the inevitable, citizens are now being hit with a massive, sudden price shock—a situation he argued would have been far less painful had the government stuck to the gradual adjustments of the past