Pricey oil erodes years of Latin gains

Like most of the world's low-income people, they spend the largest chunk of their wages on food. Basics, including eggs, rice and beans, have all jumped in price by more than 30% in the last few months, cutting deeply into the family's $500 monthly income. Jose, a laborer, pawned his wedding ring to buy groceries after a short bout of unemployment. Maria, who works weekdays in the central market downtown, got a loan from her employer.

She recently took a weekend job as a domestic and pulled her two oldest children -- 14-year-old Laura and 10-year-old Kimberly -- out of Catholic school. Only 7-year-old Bryan is attending classes. The family can no longer afford the $17 a month in tuition for each girl on top of its debts, child care and ballooning food bills.

"I'm frightened," said Maria, 32, displaying the near-empty larder. "I'm working seven days a week, and it's still not enough."

Though exporting nations such as Mexico, Brazil and Chile have profited handsomely from their petroleum, soybeans and copper, Central America has reaped few benefits from the commodities boom. The region imports much of its grain and virtually all of its oil.

Pain at the pump is severe. Drivers in San Salvador pay about $4.76 a gallon, up more than 25% over the last year. The price of diesel, the most heavily used vehicle fuel in the country, has jumped about 75% over the same period, to about $5.13.

The capital's bus drivers recently raised fares by a dime on some routes, a 40% increase that has hit consumers hard. Rising fuel costs have rippled through the supply chain, boosting the price of virtually everything.

It cost Pablo Alexander Reynosa his job. Until recently, the 29-year-old father of four worked for a large car dealership in San Salvador cleaning and prepping vehicles. He said high fuel prices have been a blow to sales, leading his boss to fire him and several other employees in May.

Reynosa has yet to find another position. His savings are about gone. He said he's contemplating returning to Van Nuys, where he once worked as a carpenter and gas station attendant. News of the U.S. economic slump and crackdowns on illegal immigrants doesn't scare him.

"Things may be bad there, but they're worse here," he said.

In fact, a slowing U.S. economy has retarded growth of remittances, which are crucial to the Central American economy. A weak U.S. dollar means the money sent home from the States buys less than it used to. Many in El Salvador, which embraced the greenback as its official currency in 2001, are longing for their old currency, the colon.