Latest Taxi Strike Highlights Honduras' Critical Oil Dependence

Wednesday 9:00 A.M. and the street is full of taxis. Nothing unusual in Tegucigalpa, except these taxis aren’t taking fares and aren’t moving for anyone, except perhaps the President. This is the stage for another strike by the taxis drivers of Tegucigalpa, worried at the extent of which the high price of fuel is affecting their livelihoods. Over a hundred taxis blockade the street outside the Presidential House with other strikes occurring all over the country, the drivers patiently waiting for their President to make an appearance. Such strikes are not uncommon in Honduras and vary in size and success but over the past few years have been able to exert some influence over the economy of Honduras, such as succeeding in convincing the government to lower the cost of fuel. These successful strikes have made the taxi drivers quasi-economic heroes of the people, a role some are keen to revive. However, this is not a unified strike. Two factions appear to be emerging in this most recent strike. And ironically it is over a decision from the government to reduce their fuel costs.

Divisions in the Taxi Ranks The government agreed to increase the basic rate for taxi drivers from 10 Lempira to 12 Lempira. This seems like a simple solution and many taxi drivers are content with it. However, some have realized that this shifts the burden of cost from the taxi drivers to their customers; the very people previous strikes have resulting in helping. When the cost of oil increases in Honduras almost every other commodity rises as well. Thus taxi customers will face increased costs in almost every aspect of their daily lives. For the striking drivers increasing another cost for the population is not an acceptable and so, as well as protesting against the high costs, they also have signs condemning the rise in the basic rate.

The solution they would prefer is a monthly bonus from the government so as to subsidize the increased costs without impacting the passengers, however they are willing to accept a tax reduction, but are aware this may result in increased costs in other areas of the economy.

Powerless in the Global Market The high cost of oil and fuel has occurred primarily because Honduras is a net importer of these commodities. It produces no crude oil of its own and since 2007 no longer owns a refinery. Thus Honduras has to buy its oil and fuel from the global market which has seen a huge increase in demand while a relatively small increase in supply. Combined with speculators who predict future higher prices and now treat oil and the weak dollar (and therefore a weak Lempira due to the stable exchange rate) as alternative investments the price of oil has skyrocketed and Honduras is powerless to affect this market trend.

Future Economic Decisions And it is precisely this powerlessness that the striking taxi drivers understand. In the long term such a market trend should indicate that Honduras should begin reducing its huge dependence on oil. Initiatives to encourage citizens to take buses rather than individually drive or take taxis, as well as promoting cycling and walking, would help to reduce the fuel demand. Giving businesses targets for efficiency in the long term as well as seeking to increase the low level of renewable energy sources would also help. But for the taxi drivers striking this week, while their moral stance may be strong, they were not able to bring Tegucigalpa to a complete standstill as has previously occurred. This may be due in part to the divisions within the taxi community. In previous strikes the President has had to order the police and even the military to unblock the roads. This time however, while drivers were confident he would appear, no vast operation was required to reopen the streets and as of going to press, no response has come from the President. And one has to wonder what the next move of this strike, if there even is one, will be.