The government of Luis Lacalle Pou announced a new drop in fuel prices after four months of freezing rates, in line with the recommendations of the Regulatory Unit for Energy and Water Services (Ursea) that in his last report of Import Parity Prices (PPI)stipulated decreases in all items when compared to April.
The new fuel tariff schedule in June will mark a reduction of 2 pesos for gasoline and 4 pesos for dieselMeanwhile he supergas it will remain the same value —as long as a significant gap with respect to the PPI persists. According to him Ministry of Industry, Energy and Mining (MIEM)the decision was made “after the reduction registered during the last month in import parity prices after several months of relative stability.”
In this way, Super gasoline will have a maximum retail value of 69.89 pesos; while diesel 50S can be obtained for up to 52.99 pesos per liter at pumps. This means a 2.8% reduction in Super 95 gasoline and 7% in 50S diesel. It is not yet known what will happen to the prices of Premium 97 gasoline or 10S diesel.
What did the Ursea report say?
According to the Ursea PPI report, the values of the Super 95 naphtha fell 3.91% with respect to last month, while the same occurs with the Premium 97 naphtha, which showed a decrease of 3.80% during May, according to PPI, data known in the last hours and that the government took into account when making its decision.
The steepest downgrade was expected for the diesel 50S, that between this month and last month it depreciated 9.32%, very similar to 9.31% that the diesel 10S. Meanwhile, the decline for the supergas, I stay 9.76% cheaper than in April.
However, it was expected that the reduction announced by the Executive would be less than the reference values set by the PPI, which does not account for tax, distribution and sales expenses.
It should be noted that this month Brent oil fell 10% and it went from costing 85 dollars the barrel to be worth 76 dollars.
What will happen to fuels in the second half of the year?
Specialized media forecast increases of up to 100 dollars in the price of a barrel of crude oil for the second half of the year. This already happened in mid-2022 when the rise in the price of oil caused the price of a gallon to rise in the Gulf of Mexico and, consequently, generated an increase in the Super Naphtha which reached 2 dollars, that is, 80.88 Uruguayan pesos.
On the other hand, it is necessary to take into account the maintenance and repair tasks that will be carried out ancap in the La Teja refinery in September and that will also affect the economic performance of the company.
For four months, the refinery will stop working completely. This will mean a loss of 180 million dollars for Ancap, for which its board of directors approved the taking of debt for up to 300 million dollars to sustain the financial balance of the company
Due to this, the company must import the fuel, through tenders, in order to maintain the amount that the company always has. One of the main companies, and also one of the largest in the world that handles more than 6 million barrels of fuel per day, is trafigura which has previously sold barrels of fuel to the state company at a convenient price.