Lacalle Pou on fuel adjustment: "Ancap’s back is finished"

If there was any (minimal) chance that the fuel rates to the public do not register changes in June, it finished disappearing this Saturday. The President of the Republic Luis Lacalle Pou declared at a press conference during the inauguration of a truck transport service between Juan Lacaze and Buenos Aires that Ancap’s back “is over” and that it would not be “wise” to continue stressing the finances of the oil entity with a price below what the international market photo shows today. On Friday, the latest Ursea Import Parity Price (PPI) report was released, which showed a new upward correction for rates in Uruguay. That is one of the inputs that the Executive Power puts on the table to define what decision it makes.

“Obviously, I’m not saying that this Ursea report conditions, but it gives a preview of how the world oil situation is,” Lacalle Pou said in statements to the press picked up by Universal radio.

“Every time we don’t increase what we should increase, which is what has been happening for some time, that is Ancap’s sacrifice. The back is basically over,” he assured.

The president added that keeping the accounts of the oil entity “balanced” cannot be waived because if situations of the past (2016) cannot be repeated when Ancap had to be recapitalized. Although he clarified that today “it is far from that, we must be very careful with the handling of finances.” Lacalle Pou commented that the oil market “is volatile” and regretted that he had not shown a downward correction, which was what the government “expected.”

The president specified that he still did not have a definitive evaluation and that at the beginning of the week he will resolve the issue with the Minister of Industry, Omar Paganini, and the president of Ancap, Alejandro Stipanicic. The Minister of Economy, Azucena Arbeleche, and the director of the OPP, Isacc Alfie, also usually participate in this discussion.

as he knew The ObserverExecutive Power will resolve this Tuesday what it will do with the fuel rates in June. The official numbers updated to May 25 show that the price of diesel has an offset of $10.75 per liter with respect to what marks the reference of the international market and, in the case of Super gasoline, the gap is somewhat smaller and is located at $6.41 per liter. The difference occurs as a result of the fact that the rates have been adjusted below what the Import Parity Price (PPI) indicated.

Given the criteria used in recent months by the government for these rates, it is likely that the authorities will favor a partial adjustment and not correct all the difference that exists today. This as a way of mitigating the effect that a rise has on production and also on inflation, and at the same time attend to the entity’s finances. But the last word on the subject is held by the economic team and President Luis Lacalle Pou.

The current price of diesel is $61.99 per liter. If the PPI rule were followed, in addition to other variables incorporated by the Ministry of Industry, the adjustment should be 17.3%, with which the pump price projected for June would be $72.74 per liter to be on par with the international market.

In the case of Super gasoline, the current price is $79.38. The official projection marks that this gasoline should be corrected by 8.1%, with which the new retail value would rise to $85.79 per liter.

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