Macri's decision makes oil companies angry

It was one of the records of macro-management disinherience: the gas freeze measure had been announced by the president himself but, 11 hours later, critics of the oil industry – including YPF – had led to suspend

Then the Minister of Transport, Guillermo Dietrich, came to confirm that the fuels will be "frozen for 90 days" because "a decision was made".

Later, the documents were returned, confirming that the measure would be respected, but this time, they specified from the government that this would be done following negotiations with companies. These conversations, added official sources, will begin this Thursday.

In fact, since Mauricio Macri announced, as part of its economic stimulus package, a gas price freeze for 90 days, an ambiguous feeling prevailing among the players in the economy. production and sale of fuels.

It happens that while this decision would allow, as dealers understand, to recover a flow of sales which only declined last year, in the eyes of the oil companies, the measure would cause losses of several million dollars for the sector in general.

There are other negative effects that could take shape. Thus, in the context of salesmen, voices that anticipated the lack of fuel resulting from this official decision to force oil companies to face higher costs were not lacking.

The official measure established an exchange rate of 45.19 pesos and a Brent price of 59 dollars. The market, meanwhile, closed the day Wednesday with a price in dollars above 62 pesos.

While the price of a liter of gasoline is mainly determined by the costs in US dollars, companies should allocate a lot more pesos to pay for the crude.

"This action by the government will generate a monthly loss of $ 250 million for all refinery and gasoline companies."exposed before Professional sources close to one of the leading marketers.

At the same time, there is no shortage in this segment of those who, in this scenario, warn of a future scarcity arising from the oil companies' decision to take care of their financial backs.

"Until the government does not disclose a compensation plan to companies for the efforts they have to make, it is logical to think that one of the companies could reduce the demand for crude oil"he said to Professional A source of refinement.

There were also those who thought that, due to the frozen value of the supplier, more of a production company would export crude oil better abroad – the selling value is being released – instead of the Use for refining for marketing in pesos in the country. indoor market

The question was still under discussion when, to everyone's surprise, it was learned that the freeze was being reversed. Or at least, consider the redundancy, that freezing would be "frozen".

Energy officials said the implementation of the measure would be postponed until the conclusion of an agreement with the oil companies. It was therefore unclear whether this implied that the measure was specified in the original terms, whether there would be any changes in the direction of the prices or timing of the application or whether, directly, there would be no frost.

For the moment, Wednesday night, and given the obvious resistance of the sector, the government has decided to convene the oil companies at a round table to agree on the implementation of the freeze.

Naphtha, in the political debate

The situation immediately blamed the government for failing to ensure the security of this announcement, which was subsequently questioned.

And he had the inevitable political connotation. For example, Guillermo Nielsen, one of Alberto Fernández's main economic references, said: "The presentation of the oil freeze is very irreproachable.We must take care of YPF, which has about 130 investment funds among its shareholders , which will be necessary for the development sector in the coming years.The price is not fixed by the government.

During, In government, all cards are placed in the predominance of the market that YPF holds as a tactical letter to keep the price ironed. It turns out that beyond the official announcement, the truth is that oil companies are not required to ask for any permission to change their values ​​at gas stations.

"If YPF maintains its prices, the rest – according to the logic of the market – will not make any variations either. the government negotiated with YPF this idea to apply the freeze. Companies can only withstand the storm if the state guarantees them a type of tax exemption. Otherwise, it will be difficult for your finances, "he said. Professional Guillermo Lego, director of CECHA, the confederation bringing together paper manufacturers from all over the country.

The duration of the transaction with YPF, irrespective of the official intention, is tweaked between oil companies and traders, as 49% of the company's shares are in private hands. It remains to know the response of these shareholders after the sharp devaluation of recent days and, given the fact that the oil company is listed in New York, the pronouncement of the regulator of stock markets in the United States.

Alert station

Although Lego has relativised the possibility of short-term failure, he nevertheless acknowledged that among the paper mills "there are those who feel that something like this can happen again and are alert".

"If Brent goes off, we'll see how companies deal with it, something that can happen quietly, and the values ​​that have been set now are in the scenario of last month, not the current scenario." who have had bad experiences are: the first to worry that gasoline is running out, "he said.

Gabriel Bornoroni, President of the Federation of Petrol and Allied Distributors (FECAC), said Professional that the calm of the values ​​will quickly translate into an improvement in the number of sales at the points of sale. And he foresaw that marketers would go ahead with complaints if there was a shortage.

"The sale will improve if we maintain a complete offer. Until now, oil companies have reported that there would be no inconvenience in this regard. As presented, the price freezing measure will encourage consumption and insurance to allow a resumption of the sale of higher quality fuels. We hope there will be a benefit, "he said.

In the first half of 2019, the market experienced a collapse of 24.4% in terms of higher gasoline and 7.85% in diesel at the highest prices. For fuels in general, the decline is not more pronounced as sales of diesel, mainly used in the field, and super-gasoline rose by 7.83 and 5.76% over the course of the year. same period, respectively.

Applied Policy

The government decided to fix the price of the dollar and Brent crude to freeze gasoline and diesel prices by: 90 days from Wednesday, as part of the measures announced by President Mauricio Macri to improve the economic situation after the primary elections.

Since this price was the price that each refinery had in force with its supplier, it was therefore decided to define the variables on August 9th values, with the dollar at 45.19 pesos and the barrel of Brent at 59 dollars, was explained Wednesday from the Palacio de Hacienda.

From this announcement, the Energy Secretary in charge of Gustavo Lopetegui indicated that is working on designing resolutions that will provide legal support for the application of the freeze measureand since January 1, 2018, a fuel-free market is in effect.

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