Oil Prices

A former president of Honduras's economists' association said the government's decision to raise the fuel subsidy from 50% to 65% warrants scrutiny given global oil prices exceeding $100 per barrel, and cautioned that prolonged subsidies strain public finances.

The government raised its subsidy of diesel and regular-gasoline price increases from 50% to 65%, spending about 1.3 billion lempiras (roughly $50 million) to shield consumers and transport from Middle East conflict–driven oil volatility.

Escalating international crude prices and Middle East tensions risk pushing up fuel costs and inflation in Honduras, squeezing household budgets and business operating costs across the import-dependent economy.

Honduran authorities forecast slight fuel price increases next week, citing the ongoing conflict in the Middle East.

Economist Amparo Canales says Honduras must reassess its economic outlook due to unstable oil prices and rising international inflation, requiring a review of the monetary program in the third quarter as the economic environment shifts.

International oil prices have fallen to around $82 per barrel, but energy sector representatives warn fuel prices in Honduras could take four to six months to reflect the decline due to exchange rates, import costs, and other market factors.

Honduras's fuel subsidy has already cost 860 million lempiras (about $34.5 million) against a budgeted 680 million, with full-year costs projected at 1.2–1.3 billion lempiras, prompting the Finance Ministry to plan internal budget adjustments and consider narrowing the subsidy to lower-income households.

All major petroleum products will drop in price starting June 9, with kerosene falling 4.14 lempiras per gallon and regular gasoline declining 3.45 lempiras per gallon, as the Energy Ministry attributes the cuts to lower international oil prices following Middle East tensions.