“The engines of the economy run on diesel. The votes for gasoline”, highlighted the One Uruguay (USU) movement.
Guillermo Franchi, a member of the movement, told The Observer that the USU is concerned that this change in the price of fuel is “a political decision.”
From the group of producers, transporters and actors linked to agriculture, they question why the government decided to lower the price of one of the fuels and not of both, if it is related to movements in the value of crude oil.
“In Montevideo the gasoline-diesel sales ratio is 80%-20% and in the interior it is exactly the opposite. Where the population is most concentrated is where the fuel drops, which percentage-wise is the one that has had the fewest increases,” Franchi said.
You pay at the greengrocer
In the change in the value of gasoline and the stability in the value of diesel, producers see a problem of competitiveness.
Diesel oil is the fuel most used by the agricultural sector, but it not only affects production, but also logistics, for the transport of inputs and then products, highlighted the producer, who said that in Argentina diesel costs “a quarter” of what it costs in Uruguay, while in Brazil half. Both countries develop agricultural productions similar to the Uruguayan ones.
Pedro Scremini, a member of USU, commented that “fuel is very expensive in the country” and that leaving the price of diesel stable “doesn’t change anyone’s life”.
“When you eat a steak or a piece of lettuce it has diesel, diesel makes everything more expensive. I buy it at the greengrocer, at the noodles, I pay for diesel there because the costs are transferred there, ”she stressed.
Regarding this, Franchi assured that they see “a dissociation between what is said and what happens”, because the political system speaks of the increase in inflation “and when the time comes when that can be combated by modifying the price of the input that defines the freight rate and more merchandise moves in the country, that does not happen”.
The decision to plant more or not
Diesel corresponds to 15% of the production costs of some productions, for example the rice cookerreported Alfredo Lago, president of the Rice Growers Association (ACA). In the prior to the time of greatest consumption of diesel in this sector, such as spring planting“if there were a drop, that could have a positive impact on the decisions made by the producer about how much area to plant,” he said.
Days ago the ACA met with the President of the Republic, Luis Lacalle Pou and this topic was one of those that was put on the table.
According to Lago, the president conveyed to the producers that he had the same expectation as them of a discount. “We understood a general reduction and perhaps he already presumed that it was going to be only in gasoline. There was no commitment but we all hoped that the diesel would drop, ”he indicated.
After the government’s announcement, Lago expressed on his Twitter account that the drop in the price of gasoline “does not take into account the reality of the economic equation of the fuel chain, the adjustment could be greater and general”, “it does not adjust to the financial situation of Ancap” and “Loss of competitiveness is generated, the region has prices much lower”.
?About:
1- It does not contemplate the reality of the economic equation of the fuel chain, the adjustment could be greater and general.
2- Does not fit the financial situation of @AncapUruguay.
3- Loss of competitiveness is generated, the region has prices much lower. https://t.co/YAhV5tdKgM– Alfredo Lago (@FreddyLago) August 31, 2022
