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Tuesday, December 6, 2022

The Uruguayan government took a new step to reform the supergas market

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For this, The Executive Power seeks advances in the supergas market through Decree 343/022, in which it urges Ursea on a new regulation that contemplates “the general conditions and principles that must be met in the links, at least, between supplier and bottlers, and of these with market distributors ” of Liquefied Petroleum Gas (LPG).

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The measure is a new step towards the comprehensive reform of the fuel market.

Paul Vignoni

What does the decree say?

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According to the decree published on October 21, the new regulation of the supergas market must include: compliance with the principles and rules of free competition in the sector; equitable penalty mechanisms for both parties, for breach of contract; transparent mechanisms for nominating and assigning the product by delivery point; and transparency in the payment scheme, invoicing and deadlines.

In addition, in the particular case of bottlers, the regulations must “consider the need for the existence of a distribution network, own or accredited through contracts with third parties.”

Likewise, before December 1, 2024, Ursea must carry out a “system efficient cost review study”; “define a methodology for calculating the definitive Maximum Intermediate Price”, that is, the price at which the National Administration of Fuels, Alcohol and Portland (Ancap) it will sell the supergas to the distributors; and define “efficient distribution margins”.

The goal behind the measure

In addition to advancing with comprehensive reform of the fuel marketthis measure seeks modify the costs of production and distribution of supergasgiven that currently this product subsidized by the State implies a loss of 100 million dollars per year, as both Ancap and the government itself have said on several occasions.

The contracts that the state company has signed with the supergas distributors expire on February 28, 2023. For his part, the president of Ancap, Alejandro Stipanicichas already announced to the distributors that there is no intention to renew them as they are formulated today, given that “they are based on costs from another era”.

Source: Ambito

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