Economic measures modify the price of a gallon of super and diesel gasoline

Ecuadornews:

Cities like Quito and Guayaquil awoke this Thursday, December 27, with the surprise of an increase in the price of super gasoline in some service stations. Its decision responds to the latest economic measures applied by the National Government that have been in force since December 26 after being published in the Official Gazette.

This is the liberalization of the sale price of super gasoline that will now be regulated based on the price delivered at the terminals of the public company Petroecuador, which stands at $ 2.31 (excluding VAT). Article 1, paragraph 6 of the Reform to the Substitute Regulation for the Regulation of Prices of Hydrocarbon Derivatives, states that “the terminal sale price for super gasoline, for the automotive sector, will be determined on a monthly basis by Petroecuador based on the weighted average cost plus transport, storage and marketing costs, a margin that may be defined by the public company indicated and the taxes that may be applicable “.

The Ministry of Energy and Non-Renewable Resources reported in a statement that “there will be a free offer and demand for this hydrocarbon, therefore, the cost of selling to the public at the service stations will be set by the distributors.”

In an interview with EL TELÉGRAFO, the Minister of Hydrocarbons, Carlos Pérez, explained that “we are not going to control the prices (of the super gas stations) as such, what we are going to control is through market rules.”

In the case of Petroecuador’s stations, which covers 25% of the market, they will maintain the lowest price to “balance” the competition with private distributors, Pérez added.

Citizen reactions

In a tour made by some gas stations in the capital, the increase in super gasoline was evident. The rush to comply with the release of the price was evidenced in marketers such as Primax, who put the new value with sheets of paper and in an improvised manner.

While in different marketers the value of the super was at $ 3.10, at Petroecuador’s gas stations it remained at $ 2.98. The reactions of consumers were immediate. For Maricela Benavides the increase took her off guard and when she went to tank her vehicle she found the new price. She opted to mix super with extra to fill the tank. “One day the Government says that prices do not go up any more and the next day they increase. This hurts the pocket of the Ecuadorians because the products start to rise too, “she lashed.

On the other hand, Fernando Lastra acknowledged that the increase in super gasoline is something that had not budgeted, however defended the decision of the Government and noted that it is the only way out of the economic crisis that crosses the State. “It is a painful but necessary measure and now the people have to pay for the broken dishes of the bad decisions and the bad management of the previous government”, the user emphasized.

Fuel experts agreed that the decision to reduce the fuel subsidy reflects a lack of planning although they support the decision. The oil analyst Luis Calero said that “there is the idea that they are improvising in taking measures and that they do not respond to a schedule. (Neither) had the compensation mechanism been defined, “he said. However, he considers that the decision to release the marketing margin to gas stations to fix the value of super gas is right because the price allows healthy competition.

“A ceiling to fix the value does not exist. It will be determined by the competition. What should be controlled is that there are no oligopolies or agreements between marketers to put very high ceilings, “warned the specialist.

The analyst Fernando Santos believes that the decisions of the regime point to a way: privatize the commercialization of fuels. He emphasized that the private company should have a greater participation in the commercialization of fuels, however he questioned that the measures of the Government see the lack of planning.

He also stressed that the release of the profit margin for super gasoline will force marketers to enter healthy competition. The super gasoline subsidy review began in August when its price increased from $ 2.30 to $ 2.98 per gallon.

Minister Carlos Pérez argued that liberalization was not carried out before because the country’s conditions were different. For example, there was no application of the Amazon Law. Additionally, the National Assembly asked to review the price of crude initially set in the budget pro forma, which meant a reduction of $ 58 to $ 50 a barrel of crude oil. He did not rule out that in the following year the review will continue. (I)

Source: https://www.eltelegrafo.com.ec/noticias/economia/4/medidas-economicas-precio-galon-super-diesel