Oil Importers Threaten to Halt Investments in Honduras

Gasoline and diesel importers operating in Honduras have threatened to halt new investments in the country unless the government revises a price formula, which is reportedly hurting profits, according to Reuters.

The news source reported that international companies including ExxonMobil, Royal Dutch Shell and local fuel distributor Dippsa are complaining that the government’s price formula, aimed at keeping fuel prices low, is costing them substantial amount of money in lost profits.

The Honduran government sets the price of imported fuels under the price scheme which has not been revised since January 2007. The distressed importers claim that the formula keeps the price of regular gasoline on par with higher-quality premium fuels, hurting their profits, according to Reuters.

The companies are reportedly facing difficulty in operating oil terminals due to the losses, leading to fuel shortages in the country.

The government has stated that it is essential to control prices, given the elevated prices of the imports. The foreign oil firms reportedly account for around $400 million of existing oil infrastructure.