El Salvador subsidizes fuel prices for customers that pay in Bitcoin (BTC)

Nayib Bukele, the President of the Republic of El Salvador, has announced that citizens can get $0.20 (£0.15) slashed off the price of each gallon of fuel they purchase.

However, there is a catch, seeing as Salvadorans must use the Chivo, the government-backed Bitcoin (BTC/USD) wallet, to be eligible for the subsidy. President Bukele disclosed this news through a tweet on September 30, describing it as a positive initiative for the pockets of Salvadorans.

According to him, the state-owned company Chivo negotiated with leading gas station companies in the country to let users enjoy the reduced fuel prices starting October 1. He added that this subsidy erases several increases in the international prices of fuel. The President also believes that this discount will reduce transportation costs in supply chains.

2. La empresa estatal Chivo negoció con las empresas gasolineras más grandes de nuestro país, para que a partir de mañana, sus estaciones vendan cada galón de combustible $0.20 más barato, con @chivowallet.

Esto borra varios aumentos del precio internacional de los combustibles. pic.twitter.com/V3qG168isV

— Nayib Bukele 🇸🇻 (@nayibbukele) September 30, 2021

Bukele further noted that there isn’t a limit on the discount, adding that any Salvadoran and companies based in the country can buy as much fuel as they want.

Apart from fuel prices, Bukele also announced that he had authorized a fund to help reduce the price of liquified gas.

1. He firmado y ordenado la publicación del decreto que autoriza un fondo para estabilizar el precio del Gas Licuado.

Para mañana, el mercado internacional programaba un incremento de $1.17 en el cilindro de 25 lbs.

Pero ahora, ya no habrá incremento, sino una leve reducción. pic.twitter.com/lAnNhgLhjj

— Nayib Bukele 🇸🇻 (@nayibbukele) September 30, 2021

He pointed out that the international market signed off on a $1.17 (£0.86) increase in the prices of 25-pound cylinders. However, the fund would ensure Salvadorans get a slight reduction. However, the government only intends to foot the extra costs for one year, according to Bukele.

Bukele continues getting resistance

This discount is El Salvador’s latest move to foster BTC adoption among its citizens. While this deal will benefit Salvadorans that choose to pay using the Chivo wallet, some citizens believe it is a sham.

For instance, a Twitter user going by Adan_3840 said,

Those 20 cents will come from all of us right? The gas station does not lose, there goes the refund after paid with taxes of even those who walk on foot.

Another user ridiculed the government’s move, claiming it was out of desperation. According to him, this subsidy shows that the government manipulates fuel prices. He further called the government out, asking why it had not introduced the discount earlier through another channel.

Es grand la desesperación verdad pte.? Con ese "negocio" hecho x su empresa chivo, con las gasolineras, queda demostrado q está en manos del estado regular los precios d los combustibles. ¿Porq no lo hizo antes d otra manera? Ahora quiere meter como sea el bitcóin.

— Arthur (@Arthur10340394) September 30, 2021

This news comes after Bukele claimed that over 2.1 million citizens had adopted the Chivo wallet by September 25. Nonetheless, these figures ruffled the crypto critic and author David Gerard, who claimed Salvadoran officials were presenting the President with false information.

2.1 million Salvadorans are ACTIVELY USING @chivowallet (not downloads).

Chivo is not a bank, but in less than 3 weeks, it now has more users than any bank in El Salvador and is moving fast to have more users that ALL BANKS IN EL SALVADOR combined.

This is wild!#Bitcoin🇸🇻

— Nayib Bukele 🇸🇻 (@nayibbukele) September 25, 2021

In his Attack of the 50 Foot Blockchain newsletter, Gerard pointed out that the Chivo wallet would be handling more transactions a day than Visa does globally if Bukele’s data is accurate.

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