President Nayib Bukele US$0.20 Discount For Gasoline Buyers With Bitcoin

Discounts on gasoline purchases have not made the people of El Salvador fully accept Bitcoin. (photo: twitter)

JAKARTA - El Salvador President Nayib Bukele has announced that local consumers can enjoy a reduction in gasoline prices of US$0.20 (IDR 2800) per gallon when paying using the government-backed Bitcoin wallet, Chivo.

He described the news as "positive news for Salvadoran pockets". President Bukele announced the subsidy via Twitter on September 30. According to a rough translation, Bukele states:

"The state company Chivo is negotiating with the largest gas station company in our nation so that starting tomorrow, their stations will sell every gallon of fuel $0.20 cheaper, with Chivo's wallet."

Este beneficio no tiene límite y puede ser utilizado por el transporte público, emprendedores y por cualquier empresa o persona, lo que representa otro alivio directo al bolsillo de los salvadoreños.

También reducirá los costos de transporte en las cadenas de suministro. pic.twitter.com/bWs1n9mJaG

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

Bukele emphasizes that there is no limit to the discount and any local person or company can access the rebate. He added that the discount would remove "some of the increase in international fuel prices" and "reduce transportation costs in the supply chain".

However, some El Salvadorans appear unconvinced that subsidies ultimately benefit the public, with Twitter user Adan_3840 responding:

“Those 20 cents will come from all of us, right? Gas stations have nothing to lose, there are refunds after paying with taxes even those who walk”.

Others were cynical about the government's decision to offer discounts only to those paying using Chivo, with another Twitter account questioning why the government had not moved to offer fuel price waivers at an earlier date.

Along with the news, Bukele also revealed that it had authorized a fund intended to "stabilize" domestic liquefied gas prices. The president emphasized that while international markets had planned a $1.17 increase in the price of a 25-pound liquefied gas cylinder, Salvadoran locals would experience a "slight reduction" in costs.

He added that the increase would only be absorbed by the government for one year, considering that the decline in world gas prices would also be passed on to consumers during that period.

El Salvador became the first country to legally recognize Bitcoin as legal tender on September 7. Later that month, Bukele claimed that a third of Salvadorans were already using the Chivo less than three weeks after its launch.

However, audiences have expressed skepticism regarding Bukele's reports of a surge in crypto adoption, with outspoken crypto critic and author David Gerard stating that Salvadoran officials "gave him several Bukele that pleases him" that "falls apart under the slightest scrutiny."

In his Attack of the 50 Foot Blockchain newsletter, Gerard analyzes Chivo usage metrics reported by Bukele to conclude that the government-backed wallet “would make more transactions a day than Visa does worldwide” if the President's data were accurate.