Lacalle Pou decided that fuels will not rise in Uruguay in February despite the recommendation of the Ministry of Industry
Gasoline should rise 3.7% and diesel 2%
The Executive Branch resolved not to change the price of gasoline and diesel despite increases in the international price of oil and Ursea's recommendation.
Luis Lacalle Pou announced this Tuesday at noon that will maintain the price of gasoline and diesel, despite the rise in the international price of oil and the recommendation of the Regulatory Unit for Energy and Water Services (Ursea).
“The decision ratifies the policy of the current administration to reflect the evolution of prices in the international market, mitigating the increases when possible and transferring the decreases —as occurred in the last two adjustments— to the consumer and the productive sector”, said the statement.
As every month, The increase of fuel prices is the subject of discussion between the Uruguayan government and the opposition. In the last few hours, the Regulatory Unit for Energy and Water Services (Ursea) published the Import Parity Prices (PPI) for gasoline, diesel, liquefied petroleum gas and fuel oil corresponding to January 2023 on its website.
For February, the report forecasts an increase in PPIs for 7.3% gasoline and 6.3% in diesel. The unit established a recommendation that, if applied by the Executive Branch, will imply an increase of 2.65 Uruguayan pesos in gasoline and 1.18 pesos in diesel.
From these data and taking Other variables The projection made by the Uruguayan Ministry of Industry, Energy and Mining makes the recommendation, which is taken more directly. For the retail price of naphtha Super 95 for February shows that there should be an upward adjustment of 3.7%.
For its part, in the case of diesel < /b>the projected adjustment is 2%, so the retail price would go from $58.99 to $60.17. The raise in this case would be $1.18. But the government of Luis Lacalle Pou decided to continue with the same values as in January.
It must be taken into account that these are the projections if the international reference were strictly followed, however, on multiple occasions the Executive Branch has decided not to transfer the projections to the retail price.
The government's decision
Following the reduction applied in January of $3 in the price of gasoline and $6 in diesel, the Executive Branch made the decision to maintain the values. The President of the Republic, Luis Lacalle Pou, referred in the last few hours to the fuel price for February: “We are thinking of seeing if Ancap, its finances, can bear not raising it despite Ursea's recommendation. There is no definition in this regard, I was in contact a little while ago with the Minister of Industry and it is the path that we are going to try to follow, “he said.
Gasoline should rise 3.7% and diesel 2% as of February 1, according to the Uruguayan government's retail price forecast.
He then referred to the changes brought about by the Urgent Consideration Act, which adjusts the price each month . “When fuel has gone up, sometimes the government has gone up, sometimes not. They used to just go up,” he added.
In statements to the press reported by Subrayado (Channel 10), the Industry Minister, Omar Paganini, said that they reached this resolution after to review the finances of Ancap and the economic situation in general. “Ancap can support this decision well because it has margins to sustain itself. We are calm with the accounts of Ancap for this month”, declared Paganini.
How fuel prices are set in Uruguay
The price of fuels in Uruguay is determined monthly from a tool called Import Parity Prices (PPI), and is applied to the import of petroleum products as a price of reference by the Regulatory Unit of Energy and Water Services (Ursea), which is then used by the Executive Branch to set the final rates.
projections if the international reference were strictly followed, however, on multiple occasions the Executive Branch has decided not to transfer the projections to the retail price.
The objective of this methodology which has been applied since 2002, but was modified in 2010 and 2017, is to make the costs of fuels (gasoline, diesel, fuel oil, liquefied petroleum gas or supergas, and propane) transparent to final consumers. Especially considering that the import and production of petroleum derivatives in the country is in the hands of the National Administration of Fuels, Alcohol and Portland (Ancap), a Uruguayan state company.