HONDURAS: FINAL FUEL REPORT DELAYED; STRIKES

C O N F I D E N T I A L TEGUCIGALPA 002457

SIPDIS

STATE FOR EB/IFD, WHA/EPSC, INR/IAA, DRL/IL, AND WHA/CEN
STATE FOR CA/OCS/ACS/WHA AND DS
TREASURY FOR DDOUGLASS
STATE PASS AID FOR LAC/CAM
DOL FOR ILAB

E.O. 12958: DECL: 12/06/2015
TAGS: ASEC CASC ECON EFIN ELAB ENRG EPET HO PGOV
SUBJECT: HONDURAS: FINAL FUEL REPORT DELAYED; STRIKES
THREATENED

REF: TEGUCIGALPA 02194

Classified By: EconChief PDunn for reasons 1.5 (B and D)


1. (U) Presentation of the third and final report on fuel
pricing by the Honduran "Notables Commission" (a select
commission of Honduran citizens convoked by Congress to
recommend reforms for gasoline imports pricing) has
reportedly been delayed until Wednesday, December 7, when
commission head Cardinal Oscar Andres Rodriguez is expected
to return from outside the country. The report, drafted by
an independent U.S. citizen consultant (reftel),examines the
pricing formula that the GOH uses to set prices and margins
throughout the fuel distribution process. The Honduran
Congress will be responsible for implementing the report,s
recommendations.


2. (C) According to Rosanna Guevara, a local journalist who
recently resigned from the Notables Commission, the report is
very well balanced, but its release had been deliberately
delayed until after the tightly contested presidential
elections. &I resigned because the process has become too
political. The report has been ready for at least a week,8
she said. She is also concerned that the report might not be
published in full, with only summary information released to
the public. &If it comes out now, it would be very well
received by all parties involved. With more delay comes more
pressure, which could result in strikes or demonstrations,8
she said.


3. (C) Gasoline importers apparently will suffer most from
the report,s recommendations. Mario del Cid, representative
of the Honduran Petroleum Industry group, has read the
report,s executive summary. &The importers had the
smallest margin to begin with, and they will receive the
biggest cuts,8 he said. The consultant,s recommendations,
which will likely include establishing a GOH unit to buy
fuel, will cut directly into the importers profits. &We,ve
had the least input into this process and we,ll be the ones
to suffer the most.8 At least one U.S. importer is
considering pulling out of the country if the report,s
recommendations are implemented, according to del Cid.


4. (C) The Honduran Patriotic Coalition of Solidarity, which
represents about 60 organizations mainly involved in fuels
transportation, has threatened to strike on Wednesday,
December 7, if the report does not come out by midnight on
December 6. However, Mauricio Aguilar, Director of
Transportation for SOPTRAVI (the Honduran Transportation
Agency) said to EconOff late Tuesday, December 6 that an
agreement has been reached between the Coalition and the
Notables Commission to wait until Thursday, December 8 to
release the report.
Ford