As measures put in place to help spread its “Bitcoin gospel”, El Salvador’s President Nayib Bukele has announced a $0.20 per gallon cut in fuel costs for those who pay with the government-backed Bitcoin wallet Chivo.
On September 30, the president announced the subsidy through Twitter, calling it “good news for Salvadorans’ pockets.” Bukele said, according to a rough translation:
“The state company Chivo negotiated with the largest gas station companies in our country, so that starting tomorrow, their stations will sell each gallon of fuel $ 0.20 cheaper, with Chivo wallet.”
The discount has no limits, according to Bukele, and any local person or business can take advantage of it. He went on to say that the reduction will cancel out “multiple increases in international fuel prices” and “lower transportation costs in supply chains.”
Some Salvadorans, however, are sceptical that the subsidies will assist the general people, as Twitter user Adan 3840 pointed out:
“Those 20 cents will come from all of us, right? The gas station does not lose, there goes the refund after paid with the taxes of even those who walk on foot.”
Others were sceptical of the government’s choice to limit the discount to those who pay with Chivo, with one Twitter account querying why the administration did not act sooner to reduce fuel prices.
Bukele also said that he has established a fund to “stabilize” the domestic pricing of liquefied natural gas. While the international market expects a $1.17 increase in the price of 25-pound cylinders of liquified gas, the president claims that Salvadorans would see a “slight reduction” in cost.
He went on to say that the government would absorb the rise for a year and that any decreases in worldwide gas costs would be passed on to consumers during that time.
On September 7, El Salvador became the first government to recognize Bitcoin as legal money. Bukele said later that month that less than three weeks after Chivo’s launch, one-third of Salvadorans were already utilizing it.
Onlookers, however, are sceptical of Bukele’s claims of rising cryptocurrency use, with renowned crypto critic and author David Gerard claiming that Salvadoran officials are “feeding Bukele data that satisfy him” but “break apart under the slightest investigation.”
If the President’s data is correct, Gerard concluded in his Attack of the 50 Foot Blockchain newsletter that the government-backed wallet “would be doing more transactions per day than Visa does worldwide” if the President’s data is correct.
