A proposed law to mandate ethanol in Panama’s fuel supply is facing intense scrutiny. Critics, including prominent journalists, allege the bill benefits a small group of well-connected sugar mill owners at the public’s expense. The controversy deepened this week following a separate administrative order that froze the budget of a major municipality.
The legislative proposal would require all gasoline sold in Panama to contain a 10 percent blend of locally produced bioethanol. Government officials argue the measure will reduce carbon emissions and boost the agricultural sector. Opponents counter that it creates a captive market for a select few producers, including business figures linked to past political scandals. Simultaneously, the nation’s comptroller general has severely restricted the spending authority of the San Miguelito District mayor’s office, a move labeled as political retaliation.
Controversial Figures Linked to Ethanol Push
Investigative advisor Rolando Rodríguez B. published a scathing critique connecting the two issues. He identified the current comptroller, Gerardo Solís, and a former president convicted of money laundering, as having direct stakes in sugar mills that would profit from the mandated ethanol fuel blend. Rodríguez asserts the bill guarantees these owners massive revenue without competitive risk. “They will make the business of their lives without risking capital,” Rodríguez wrote. Comptroller Solís has publicly stated he sees no conflict of interest, a claim met with widespread skepticism.
The proposed law imposes a three-tiered system. First, it makes ethanol-blended fuel mandatory for all drivers. Second, fuel importers and distributors must purchase all bioethanol produced domestically. Third, it imposes punitive taxes on any pre-mixed fuel imported from abroad, effectively forcing the local market to use the Panamanian product. Proponents say this protects local jobs and investment.
“The mere fact that he defends the ethanol bill is reason enough for me to distrust its apparent purposes,” Rodríguez stated regarding Comptroller Solís. [Translated from Spanish]
Rodríguez challenged the government’s rationale directly. “If they want to compete in a competitive market like fuels, they should do so at their own risk,” he argued. He contrasted the mandate with the freedom of Panamanian officials to seek private healthcare abroad, asking why the principle of “ours first” does not apply there.
Municipal Budget Freeze Intensifies Scrutiny
Parallel to the ethanol debate, Comptroller Solís is embroiled in a conflict with the independent mayor of the San Miguelito District, Irma Hernández. The Contraloría General de la República (Panama) recently slashed the mayor’s office spending approval limit from $50,000 to just $1,000. This action effectively paralyzes municipal operations in a district already struggling with a public waste collection crisis.
Rodríguez framed the budget freeze as a punitive measure for political independence. “Why not apply the same rule to the National Assembly?” he questioned. He accused Solís of selective enforcement, pointing to large contracts in other ministries that have not faced similar administrative hurdles. The comptroller’s office claims the action is a standard fiscal control, but critics see a pattern of overreach.
The situation in San Miguelito has tangible consequences. The district is reportedly dotted with hundreds of informal dump sites overflowing with garbage. The budget freeze hampers the local government’s ability to address this health hazard, fund public services, or pay contractors. “It harms all the residents of that district,” Rodríguez noted, suggesting the comptroller is indifferent to their plight.
These concurrent controversies have fueled allegations of systemic corruption and abuse of power. Observers note that the ethanol bill and the targeting of a political opponent both concentrate economic and administrative control. The government of President José Raúl Mulino has not intervened in the municipal dispute, raising further questions about political coordination. This administration is already facing other challenges, as seen in coverage of its political appointments previously analyzed.
Public reaction remains divided. Business groups supporting the ethanol mandate cite energy security and rural development. Consumer advocates and opposition lawmakers warn of higher fuel prices and forced subsidies. The standoff in San Miguelito continues with no resolution in sight, leaving basic services in limbo for thousands of residents. The coming weeks will test the strength of Panama’s institutions as these two separate but symbolically linked battles over power and profit play out.