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Grifos will only sell regular and premium gasoline: how could it impact prices?

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The former director of the General Directorate of Hydrocarbons (DGH), Erick Garcia Portugalmaintained the rule that provides for the reduction of fuels to only two, regular and premium, seeks to optimize the chain to reduce costs in the market, which currently resides in up to four versions, according to octane: 84, 90, 95 and 98.

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According to one of the original promoters of the law, promoted in 2021, having an unnecessarily large range of fuels represents additional spending on dyes, storage tanks and transportation for the logistics of each company.

“The taps have a compartment for each type of fuel, just like the wholesale plants. At the international level, all the countries move around only two gasolines, what is sought is to optimize the chain and give it more value, ”he said for Canal N.

In this sense, he stated that, currently, when you buy 90-octane gasohol, you actually receive one with 92 or 93 octane, because the fuel alcohol mixture increases the octane number. The same happens with the 95, which renders as 97 or 98; and the 97, which performs like 99 or 100. Indeed, the international specifications for vehicles recommend an octane number between 90 and 95.

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“These two new gasolines will bring a lot of dynamism and, in theory, will make the market more competitive, with a safer industry,” he stressed.

However, for the also former director of the DGH, Gustavo Navarrothis evaluation could remain only in theory, because finally the savings that are generated could also remain in the hands of the entrepreneur, since prices move in the free market.

However, he recognizes that the process, in which Osinergmin must follow up until it comes into force on August 30, is positive at a technical, economic and environmental level in the long term.

“In fact, at first there may not be any positive change for the public, but in the long run a competitive market always ends up transferring some savings to users. Competition is the best ally”, said Navarro.

This is because now all the taps will handle exactly the same supply of only two fuels, so it will be the same to stock up at any of them and in any district. Thus, a more aggressive competition between faucets from more and less wealthy districts would drive prices down.

On the other hand, Navarro recalled that, even when oil does not change in price, gasoline rises in some months and falls in others due to the driven season, time of travel and high consumption in the northern hemisphere, which occurs between July and August. Europe and Asia contrast with Africa, and North America with our region.

“They consume a lot of gasoline because they have many hours of sunlight, when they go on vacation that greatly increases demand and raises the price of gasoline. But this price rises from before, because it is necessary to fill the inventories. In December the opposite happens, with people staying home for the winter”, he specified.

The underlying problem is not gasoline

Erick García recalls that this change in the matrix towards only two fuels is essential to guarantee the energy security of the country, but it is not the key solution. Instead, he says that the mass use of natural gas should be encouraged given the increase in international crude oil prices.

“It is unheard of that in Lima, where there has been natural gas for more than 16 years, gasoline and LPG are still consumed. The government promotion programs are there, more dissemination is needed. Last year absolutely all the regulations for its use in larger vehicles were approved”, indicated the specialist.

In practice, he explained, the reduction to only two fuels on the market and the removal of the cheapest option will influence more drivers to choose to convert their units to this cleaner and nationally produced resource.

“Natural gas is used throughout Europe, even though they don’t have it. We have it and it is not subject to an international price like oil, but we do not use it”, he concluded.

Source: Larepublica

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