The government is studying the possibility of accompanying the drop in the international price of oil with the second drop of the year in fuel prices.
The government is considering the possibility of announcing a drop in fuel prices throughout Uruguay as of June 1 due to the significant decrease that Brent oil has had in the last month, which would allow it to be transferred to a reduction in local rates.
With the end of May, a new decision of the Executive power about what will happen to fuel prices for the new month. Thus, 2023 began with a drop in prices, and since February they have remained frozen, with the excellent refinery margins of the The Tile, of the National Administration of Fuel, Alcohol and Portland (Ancap)“subsidizing” the differences with the reference values.
In this sense, June could be the second month of the year in which a drop in rates is registered, according to Telemundo; and, on this occasion, it would be “significant” for the gasoil, although there are still doubts if the gasoline will remain frozen or will also experience a price drop.
Although the report of Import Parity Prices (PPI) of the Regulatory Unit for Energy and Water Services (Ursea) It will only arrive at the small government table next Monday, the drop in the price of crude oil in recent days is already being contemplated: this month, Brent oil fell 10% and it went from costing 85 dollars a barrel to costing 76 dollars.
The technical stop in La Teja, a point of uncertainty
Although international prices show a downward trend that, in June, could be transferred to local prices, the Executive Branch must also balance a situation that is no less: the scheduled maintenance shutdown at the La Teja refinery in September.
Up to now, the important margins that this plant has generated is what has allowed Ancap to keep prices relatively stable even at a time when rates should have increased without losing money. In this sense, La Teja is the one that has been, in some way, subsidizing price volatility of fuels in the country.
Therefore, its pause in production is a concern for the oil company —and for the government— from two aspects: on the one hand, due to the significant reduction in income that Ancap will have, which will also greatly reduce its financial back and its ability to continue avoiding the transfer of reference values to the local market.
On the other hand, it is also concerned about the increase in expenses what will the state company have to face the work itself and for the imports necessary to satisfy domestic demand; expenses to which are also added the potential risks of continuing to operate with the increase in salinity in the water, which increases the possibility of corrosion of the pipes of the refinery boilers, something that already implies a greater investment to lower the conductivity of the water .
Source: Ambito
