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Fuels: why do tap prices take time to drop?

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The price of oil and fuel begins to gradually decline in the international market and our country is no stranger to this trend. For example, from the Peruvian Organization of Consumers and Users (Opecu) they warn that the reference prices have been falling for eight consecutive weeks.

How much more are faucets earning for each gallon sold?

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The Republic found that at the wholesale level in Metropolitan Lima —the amount that is sold from the Petroperú plants, such as the one in Callao—, prices have also fallen, but, even so, the faucets operate with profit margins of up to S/ 2.00 for each gallon.

For example, according to data from Osinergmin, gasohol of 95 was reduced in the wholesale sector, from July 7 to August 5, from S/ 24.69 to S/ 21.50 per gallon (that is, S/ 3 .19 less); but in the stations, the sale price in that period fell just S/ 1.18, going from S/ 25.47 to S/ 24.29.

In this sense, it can be corroborated that between both differentials there is a gap of S/ 2.01 that the faucets continue to earn from the sale of 95 gasohol, whose national demand is 497,906 units per gallon.

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A similar panorama is observed in the gasohol of 90, which at the plant level fell S/ 2.56, moving from S/ 22.94 to S/ 20.38; while in the final sale to the consumer, it was barely reduced by S/ 1.06 and shows an average of S/ 21.67 per gallon. In general, the margin in favor of the companies is S/ 1.50 per gallon.

It is worth noting that the daily demand for gasohol at 90 is 1,108,669 gallons.

Why don’t prices go down as fast as they go up?

Just as prices go up fast on faucet boards (see charts), why don’t they go down at the same speed? A tougher position on this line has the former president of Perupetro Aurelio Ochoa Alencastrewho recognizes the principle of free market and commercial margin at the retail level, but accuses a “price debauchery”, which goes beyond renewing stocks.

The expert points out that in our country the profit margins of companies can range between 15% and 20%.

“The fuel business has a very fast asset turnover, not like a TV that lasts five years. Inventories are renewed in a few days and each one leaves a profit margin. But here we have gotten used to the fact that if we can win 20 times that margin of more than 10%, we are happy. That is already usury. That is why there is a price difference between one faucet and another of up to S/ 3 or S/ 4, practically a dollar, something not seen anywhere in the world.”, he referred.

For its part, the economist and former head of Sunat Luis Arias Minaya He warned that prices should tend to be the same regardless of the costs of individual companies, added to the fact that in a competitive market the distance to the consumer plays an important role.

“If you go along the Panamericana Sur at the height of the Conchan refinery, all the faucets that sell gasoline of different brands sell at the same price. When we look for the factors that determine that we have one of the most expensive gasolines in the world, let’s not only look at taxes. The margin of the faucet seems to be as or more important”, he concluded.

Taps take refuge in “the commercial margin” despite not exhausting their stock

While Erick García, former director of the General Directorate of Hydrocarbons (DGH), stresses that the transparency of information such as the stock of past products, the sales figures of the plants and how much is bought per day is crucial; this, in order to encourage competition.

But why, then, when oil and its derivatives rise internationally, do the taps raise their prices, even when they have not finished their stock in each season? The specialist explains that the faucet business is in the “commercial margin” that forces them to quickly raise prices so as not to be ‘offside’ in a highly speculative market.

“That happens everywhere, not only at the fuel level. If you go to the wholesale market to buy a sack of vegetables, you know that the profit you make from selling them in your store has to be enough for you to buy another sack later on. But if prices skyrocket while you haven’t finished with the sack you already bought, all you have to do is raise the prices of the vegetables you still have left because, if not, you won’t be able to stock up again. It is a reality that is demonized in the taps, ”she maintains.

Source: Larepublica

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