Oil companies want to recover what they see as a delay in pump prices
The private oil company is under state control YPF has confirmed that it will make several price adjustments to its suppliers in the next three months. The increase will be 18% in 90 daysCompany executives reported that, in line with the tax increases, the international price per barrel and internal inflation are above and above this value, in addition to this, the tax increases applied will be added. Next Tuesday we will see the first spike in pumps. It will be of the order of 7 percent.
“In 3 months we will increase prices by 15 percent, in addition to increasing taxes. We must generate and feed ourselves money to develop our business plan and our investments.” Sergio AvorniCEO of the oil company.
A total of 18% for the quarter is reached by adding 15 points for price update and 3 other transfer taxes to the terminal value.
We don’t want people to know the hikes in the morning. We want predictability and for that we work, “added the new president of the oil company, Pablo Gonzales, Who confirmed that the tax scheme on liquid fuels will change, something the president assured would be implemented under the law for the sector he announced on March 1 in Congress.
We have to establish ourselves and feed ourselves with funds to develop our business plan and investments (Afrontti)
“It’s the money we need to develop the investment plan and if the elections are in April, we would have done the same. We want to produce and all the proceeds will go into production. We produce gas and oil. “
We have a second reserve of unconventional gas and a fourth of crude oil. We have not performed any Repsol services. “We have to develop oil and gas resources, not invest in electric scooters,” he said, referring to the company’s past policies.
Sergio Avorni, CEO of YPF
On Friday, two taxes that affect gasoline and diesel prices were updated: the liquid fuel tax (ICL) and the carbon dioxide tax (IDC), which are increased every three months according to inflation. Although the update was scheduled for the beginning of this month, it was moved by decree to March 12th. During 2019 and 2020, the application of these taxes has been suspended several times.
However, the oil companies have not yet transferred these increases to final prices at service stations, although in the sector they expected a possible increase in the coming days. The fact is that other factors were added to the tax update during the month of March: among them, an increase in biofuel values at the beginning of the month that also generated pressure for a new increase, since refiners are obligated to use biodiesel and bioethanol to mix gasoline and diesel production. Prices for these inputs are set by the Ministry of Energy.
We don’t want people to know the hikes in the morning. We want predictability, and for that we work (Gonzalez)
Since the start of the year, fuel has already seen four increases. The most recent was on February 15th, although it was not applied evenly in all provinces and in some cities there were downward adjustments in values. In Buenos Aires, prices rose – on average – about 12% in the first two months of the year.
Investments
Afrontti also pointed to the company’s recent investment announcements, almost all of them geared upstream – oil and gas production.
“This year we want to resume the growth path and will increase investment by 70%, or about 2,700 million US dollars (…) 80% for research or exploration. 1.3 billion US dollars is unconventional, double what was invested last year, as is the case in 2019. Another 800 million USD in conventional form.
$ 1,500 million in crude oil and $ 600 million in gas. Of the latter, in turn, the gas plan has significant weight, with investments of $ 1500 million in four years. It is an excellent government measure of predictability. “We are the company that will invest the most in the country this year,” he concluded.
The oil company’s plan is to be able to turn to foreign investments to boost their investment. Therefore, they are relying on the hydrocarbon bill that President Alberto Fernandez announced during his inaugural speech in the regular sessions of Congress. They are confident that the law will allow access to the exchange market for foreign investments. It is something the Ministry of Economy is working hard on. Meanwhile, the Conservatives will have to do their part by displaying lower gross income, for example.
The goal is for the base to reach Congress within 10 days, and to include, in its clauses, changes to the liquid fuel tax to make it similar to the previous system, and not to update it with the average quarterly inflation.
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