In a few days, Ursea will present the report that the Executive Branch uses to determine the price of gasoline for the following month.
The government is preparing to decide what will happen with fuel prices during September. Uruguay, while waiting for the Energy and Water Services Regulatory Unit (Ursea) submit the report of Import Parity Price (IPP).
With only five days left until the Ursea submits its report, it is necessary to study what is happening in the international framework. Since July, the barrel of oil Its value decreased by 6 dollars, which impacted the price per gallon in the markets that the regulatory unit uses as a reference.
With this in mind, fuel prices would be expected to reflect a decline in September. However, it should be noted that during the last two months, the Executive power decided to maintain the values of gasoline despite the fact that the Retail Price (RRP) recommended an increase, so it could be inferred that the values will remain the same in the coming month.
How is the price of fuel calculated?
The objective of this methodology, which has been applied since 2002 but underwent modifications in 2010 and 2017, is to make the costs of fuels (gasoline, diesel, fuel oil, liquefied petroleum gas or supergas, and propane) transparent to end consumers; especially considering that the import and production of petroleum derivatives in the country is less than National Administration of Fuels, Alcohol and Portland (Ancap)a state-owned enterprise.
In this way, and based on the PPI —in addition to other political and economic considerations—, the government establishes the Ancap Plant Price (PEP); that is, the value that, without taxes, consists of the net income that the company receives from its sales.
Meanwhile, the PPI considers different costs of services related to the import of fuels in Uruguay, to then set a reference price which may be adjusted according to other corporate financial needs or public policy objectives indicated by the Executive Branch.
The calculation is not limited to the short term – as it includes investment costs in addition to operating and maintenance costs – and attempts to reflect the activity of an importer and the efficiency costs that it would eventually have to assume to access products of similar quality to those required in the domestic market.
Source: Ambito
