Puerto Rico to hike oil tax, avert public transit shutdown

[December 01, 2014]  SAN JUAN (Reuters) - Puerto Rico's legislature will agree to raise a tax on crude oil, the governor said in a televised speech on Sunday night, averting a shutdown of the island's public transit system and providing more clarity on the financial future of the U.S. commonwealth.

"It will not be necessary to cease operations of any public dependency tomorrow because we have the 26 votes to approve the measure and later the tax reform," Governor Alejandro García Padilla said in the address.

Lawmakers from the governor's own party had initially refused to agree to raise the tax by 68 percent. The increase is intended to back a bond sale of up to $2.9 billion, critical for the island's financial health.

(Reporting by Reuters in Puerto Rico; writing by Edward Krudy; editing by Megan Davies and Phil Berlowitz)

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