A bill to stabilize the value of kerosene was approved today. It is part of Plan Chile Apoya (Chile Supports Plan), which includes a package of energy measures to contain the prices of electricity, gas and kerosene.
With 141 votes in favor and 1 abstention, the approved initiative will inject US$40 million into the Oil Price Stabilization Fund (FEPP). The increase in resources will allow the government to contain the rise in the price of kerosene and, in concrete terms, stabilize its value per liter at around $1,000 Chilean pesos (US$1.20).
"Around one million homes in the country will benefit from this new measure, especially in the winter months, when this fuel is used for heating," said Energy Undersecretary Julio Maturana.
"Thanks to this law we will be able to reduce the price of kerosene by more than 100 pesos per liter and maintain a stable price throughout the winter, which will undoubtedly be very beneficial for Chilean families", he emphasized.
The subsidy amount is directly related to international kerosene and oil prices, which have trended steadily upward. This year alone, kerosene has registered a cumulative increase of 70% (35% since Russia's invasion of Ukraine). Due to the effects of the war and global supply disruptions, it is unlikely that the increase in international prices will reverse in the short term.
Therefore, increasing the size of the fund was very important. As of April 7, 2022, available resources amounted to US$4.219 million. Today, thanks to this injection, the fund will increase tenfold.