Uruguay's state-run oil company ANCAP President Alejandro Stipanicic said the price of fuel at pumps should be adjusted downward shortly after such a trend has been registered for several weeks in the international market.
However, Stipanicic warned that nothing was certain since anything can happen at a global level and it was therefore too soon to confirm a price drop after no changes were introduced in November.
Stipanicic also defended the current pricing mechanism, although he thought that the review should be weekly and not monthly. In his view, a higher frequency would mean fewer traumatic adjustments. He also gave the example of the livestock business, where traders gather every Monday to set the prices every week. ”A higher adjustment frequency means lower, less traumatic (price) adjustments. It also implies an induction to a healthier competitive practice at the point of sale level, Stipanicic argued.
The ANCAP boss also insisted that for people to trust the Import Parity system there must be a drop in prices. Under this scheme set in force under President Luis Lacalle Pou, ANCAP has netted profits worth US$6 million after US$3 billion in sales during 2022, Stipanicic also said.
We see it as good, said Stipanicic about the import parity mechanism. There are three situations that aligned in favor of ANCAP's results: higher sales volumes, an exchange rate that is pushing downwards, which benefits us, and high refining margins. All this generates a certain amount of slack for ANCAP, but in spite of that, it was demonstrated that in coordination with the Executive Branch, a substantial reduction in the price of fuels has been passed on to the population and ANCAP's finances have not suffered, he added in an interview with El País.
The most important thing is that ANCAP and the government have not taken advantage of this opportunity to capture a huge monopoly income for their own benefit, as oil companies worldwide have done, he went on.
The retail prices have been coordinated in such a way as to never transfer 100% of what happened in the world, but also taking care to never compromise ANCAP's finances, Stipanicic also said.
If the trend of the last few weeks continues, what the population has to expect is that there will be a downward adjustment in fuel prices. Why can we not say it yet? Because in the international market anything can happen, but once it starts to correlate that the decisions are technical and the exceptionality of the political decision is always in favor of the population and not in favor of ANCAP's or the State's finances, then that confidence will be gained,” Stipanicic explained.