MercoPress. South Atlantic News Agency

Uruguay's ANCAP makes US$ 88 million profit in 2021

In the only business segment where ANCAP is a monopoly “it lost money,” Stipanicic said

After several adjustments in the price of fuel, Uruguay's state-run oil company ANCAP reaped profits worth US$ 88 million, authorities from the petrol supplier reported Tuesday in Montevideo.

According to the company, Uruguayan consumers paid US$ 159 million less for fuel than they would have on the international market, but the fuel refining business kept Ancap afloat after the 2020 setback when it lost US$ 12 million.

The positive figures came by even despite local authorities deciding to freeze the price of fuel tariffs at the end of last year, citing extraordinary profits from the sale of diesel oil to the National Administration of Power Plants and Electric Transmissions (Administración Nacional de Usinas y Trasmisiones Eléctricas) UTE for the export of electricity to Brazil.

ANCAP sold fuels below the import parity index set by the Energy and Water Services Regulatory Unit (URSEA) since the government had decided to partially buffer the international increase.

According to Ancap, the company recorded a loss of US$ 32 million in the monopoly market, which was reversed with the results of the competing businesses, an exchange rate hedge, and the contribution of the controlled companies.

On the other hand, in the competing markets, the company achieved a profit of US$ 41 million, while sales of diesel oil to UTE for the export of electricity to Brazil yielded profits worth US$ 56 million.

In Tuesday's documents drafted jointly with the Ministry of the Environment, ANCAP admitted 2021 was the first time the entity recognized an environmental liability in the amount of US$ 25.9 million, an amount which was determined through an audit ordered in May 2020 on assessments regarding impacts occurred between 2003 and 2006.

“The final line establishes 88 million dollars for the whole ANCAP group with a contribution of US$ 25 million from the related companies, but from competitive businesses, in the only business segment where ANCAP is a monopoly it lost money,” ANCAP president Alejandro Stipanicic said.

“ANCAP's cash flow is getting leaner and leaner because international costs are rising and in three months we will have to pay for the crude we are receiving today, which will close in April with a reference price of US$ 110,” he added.

In 2021 the state-owned company again reduced its financial liabilities for the second consecutive year.

On the other hand, subsidies to “supergas” (liquefied petroleum gas - it contains butane and propane) during 2021 cost the state-owned company US$ 108 million, a situation that causes concern and for which they intend to renegotiate the contracts they have with the different supergas distribution companies.

“We have already talked with the companies in the sense that it is difficult for us to renew these contracts, these contracts are based on the costs of another era,” Stipanicic explained.

“Society is receiving a subsidy, but so is the bottling and distribution chain, we are going to have to work on that,” he added.