PPC13 May 2020 16:46
In the next few hours, a decree will be published establishing the return of the so-called Creole barrel. According to the draft of the decree to which Infobae agreed, the agreement reached by the sector with the Government is to establish a value of USD 45 for the barrel of local production until December 31, the removal of withholdings on oil exports and freezing of the fuel liter rate, at least, until the first days of October.
The measure of the freezing of the liter of naphtha was demanded by the national administration to the companies that produce the fuels and the reason is quite simple. The value of the liter of fuel that suppliers have today is from when the value of a barrel of oil was trading above USD 60, so the margin is still higher.
In addition, the price of a barrel of Brent, which is the one used in the local market, yesterday was below USD 30, so it still has a lot of margin. This was one of the arguments that were put on the table when it came to counteracting the complaints from the oil companies that were not very in agreement with the non-modification of the sale value.
The only thing that can modify this decision is that Argentina enters a new devaluation process or that the price of Brent that a few days ago touched its floor in the last 18 years increases its price exponentially.
The problem of taxes is more complicated because almost 50% of the value of a liter of fuel corresponds to the tax letter, so that a modification by the national administration of any of the taxes would be transferred directly to the value of the liter.
In October, the price of taxes that impact on the final price of gasoline and diesel will be reviewed and at that moment, eventually, there could be an impact on suppliers.
“They buy the barrel at $ 45 and sell fuel worth more than $ 60. It is still a business, not as much as when they bought it a barrel for $ 20, but it continues, "explained an insider of the hydrocarbon sector.
Another problem that will be sought to be solved is that of encouraging a return to consumption, in order to, on the one hand, drain the storage spaces that, in the face of the sharp drop in fuel demand, have collapsed and, on the other, generate a lifeguard in the service stations that, although open, saw sales drop by 90 percent.
Although there is little export of crude oil, the measure benefits governors who collect royalties, something that worried governors.
The other point is that of retentions and governors. A work by the consulting firm Aerarium indicates that the major beneficiaries of the measure are the producing provinces, which are benefited by the royalties collected on the value at the wellhead of the production.
Although there are 9 oil-producing provinces, 86% of production is concentrated in Patagonia, so "we conclude that the restoration of the Creole barrel represents a lifeline for the Treasury (and economic activity) in that region, taking into account that royalty income represents a fu
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