MercoPress. South Atlantic News Agency

Price of fuel goes up 12% in Uruguay

Paganini said national cost overruns were being set aside for now but will have to be taken into account sooner or later.

The Government of Uruguay Monday announced a 12% increase in the price of fuels due to the increase in the international value of oil, a product that Uruguay imports 100%.

“The Government evaluated the situation of the fuel tariff, with a maximum adjustment of 12%,” said Industry Minister Omar Paganini at a press conference, specifying that this implies an increase of 7.1 pesos (0.16 dollars) per litre in gasoline and 4.9 pesos (0.11) in diesel.

In this way, the super gasoline goes from 1.32 dollars per litre to 1.48 dollars per litre, and diesel from 0.91 to 1.02 dollars per litre in this country that usually has fuel prices among the highest of the world.

Paganini announced the government was aligning the retail price of fuels with international values, through a mechanism known as “import parity prices (PPI).“

According to the minister, due to the short-term problems caused by the pandemic, the Executive decided not to incorporate the ”national cost overruns“ into the new prices.

Meanwhile, Economy Minister Azucena Arbeleche insisted that the increase ”has to do with the increase in international oil prices“ and that ”the increase in national cost overruns is not being considered at this time,“ as those of the state oil company Ancap.

”If they were taken into account, today we would have increases of 17.4% in the case of gasoline and almost 20% in the case of diesel,“ she pointed out.

Paganini stressed that the price of crude oil at the international level ”has risen steadily since December.“

”It was at $ 50 and today a barrel of Brent oil is hovering around $ 72, which is what Uruguay takes as a reference. We are above a 32% increase in crude oil, and the market's outlook is for it to continue with a firm increase,“ he said.

”Another issue is national cost overruns. It is what we are now resigning because we understand that at the moment it is not viable to pass it on to rates,“ he said, although he warned that ”at some point, it must be taken into account.”

The measure will take effect at 00.00 on Tuesday, June 8.