Oil is falling internationally, but how are fuel prices rising in Peru?

According to the National Institute of Statistics and Informatics (INEI), fuel prices fell by 6.6% in August, but this still continues to affect the Peruvian economy.

In recent weeks, the fall in world prices for Oilwhich is now below $100 per barrel, but do you see this decline?

For former Deputy Energy Minister Pedro Gamio, this reduction in crude oil has yet to be fully reflected on the taps.

“Prices go up the elevator and down the stairs, it is true that not all sales that occur in the international market are passed on, and the argument given is that inventory purchased at a higher price must run out. “While the trend has been down for a few weeks, it was in a very small percentage,” he told RPP.

Former Director of Hydrocarbons for the Department of Energy and Mines, Eric Garcia, comments that in order to analyze more accurately whether prices actually change on taps, a mechanism needs to be put in place for all automotive fuels. .storage transparency approved for liquefied petroleum gas (CIS).

“This mechanism was approved last year, just a few weeks ago Osinergmin introduced it out of time, and I think it would be a very good decision so that we can know with confidence about the rotation of the cranes. The transparency of free competition is very important,” he said in an interview with the RPP.

Diesel continues to rise

Not all types of fuel are subject to reductions in base prices. The latest report from the Peruvian Consumers and Users Agency (CUSTODY) indicates that the reference price of diesel, which is the country’s most used fuel by freight carriers and public transport operators, rose 6.54% per gallon.

According to Economist Macroconsult, Diego Rosales notes that diesel fuel has risen in price by 6% over the past week and costs 17 sols at 80 cents per gallon on average, reaching the highest level in a year.

“The executive body to decide the requirements carriers A few months ago, he agreed to freeze diesel fuel in the fuel price stabilization fund for two months, and this period ended last Thursday (…). the price at which diesel is now worth, ”he explained.

The Macroconsult specialist notes that by the end of September we may see a new increase in diesel fuel prices by about one sol per gallon.

For his part, Garcia claims that internationally, the diesel reference price was reduced by about 17% between late June and late August, but this has not been seen as FEPC stabilized the price.

“However, it should be known that the FEPC mechanism is not intended to freeze prices, but rather to reduce the impact of international price volatility on local prices, therefore, as a result of the diesel price corridor update, the last one occurred on Thursday August 2022, the wholesale price of diesel fuel increased by about per sol per gallon (excluding tax), which is bound to have a direct impact on the final diesel price,” he commented.

But why does it affect families that this fuel continues to rise? Garcia explains that the entire economy is powered by transport, which mainly consumes diesel fuel.

“The user goes to work by car, be it a car, bus or minibus; goods from stores, from supply centers are moved by vehicles, deliveries from factories, everything is moved on diesel fuel. And that’s why it’s so important. that the user understands that when he sees the car diesel We will always have this problem because we will depend on the international price,” he said.

Another fuel that will start to rise in price in the coming weeks will be liquefied petroleum gas. INEI indicates that in August automotive LPG it fell 5.5%, but Macroconsult warns it could rise 10-12% as its term in the stabilization fund expires on September 30th.

For the Peruvian Liquefied Gas Society, this possible increase will drive up the price of taxi tickets, and they even warn that unscrupulous sellers could raise the price of gas bottles, even though the subsidy will still apply to bottled liquefied gas.

What is the solution?

Both Gamio and Garcia agree on the need to promote the mass use of natural gas.

“The country must accelerate the move towards the main solution, which is the massive use of natural gas in transport, in homes and its use in industry, as well as in the electricity market, more use of solar energy and wind energy to ensure competitive prices”

Garcia reminded that we have natural gas for about 20 years, so it should be used, especially given the low cost of SGD 1.37 to 2.10 per cubic meter that it represents in the Peruvian market.