Petroecuador’s international trade manager, Reynaldo Armijos, assures that the plan to improve the octane number of gasoline from 85 to 87 octane is being maintained, despite the setback suffered when it was discovered that the import of RON 85 gasoline was more expensive than that of 80 RON, as experts had already warned. It ensures that savings can be made by reducing the use of RON 95 or even by importing less, for technical efficiency. For Armijos, there was no failure to fulfill the plan. However, Minister Fernando Santos offered that the plan would come out in September.

When it was proposed that they would implement the plan to increase the octane of gasoline, it was indicated that the 85 octane gasoline they would import would not be more expensive than the 80 octane, but it ended up being more expensive. Was there an error in the calculation? What happened?

When we submitted the request for this project, in June the situation arose stock gasoline of 85, 93 and 95 octane were higher. On the other hand, consumption is higher from September to December. But this does not mean that the project is in limbo or with some problem. We have to cover three aspects before we formalize the import of this product: the economic part, which consists of asking the market for three proformas to get an average price. There are variations in the international price and they happen even hourly. For this reason, we announced the last tender for the purchase of RON 80 and RON 85, which gave us an increase of 5.70 USD from 85. However, the economic analysis does not lie only in the international price or in the differential, but we have to make a comparison of how much gasoline we will get from 95 octane is reduced by adding 85 and we make mixtures with it. So the price difference can be relative.

Does this mean that in the original plan it was not intended that RON 80 or RON 85 have the same value, but that with mixtures it was ensured that there would be no more costs?

Not. In June, when the plan emerged, we had a high-level meeting together with the Minister of Energy, the manager of Petroecuador and myself. There we analyzed the context and saw that out of all the RON 80 windows we imported, two windows came with RON 85. This is because they had stock this type of gasoline. Something similar happened to us with diesel oil, because we got premium diesel for the same price. At that time, in conversations with suppliers, they indicated to me personally that if we buy gasoline of 85 octane or 80 octane, it will be at the same price. However, now in September we have this increase. Every month is different and every day is different. But at that point we were told that the prices would be the same.

Didn’t you see this? Being the experts in the market, didn’t you realize that this could change in a few months? For example, experts have already told us that what you were thinking about will not be possible…

I am not saying that the project could be successful only in June. We must not forget that Petroecuador uses a mixture of 95 and 80. If we import less 95, we will achieve savings. Experts rely only on advertising, but forget the issue of mixtures. Out of 95 imports, we sell only 3,500 barrels, and more than 75% of this product goes into the extra blend. Another thing that experts forget is technical efficiency.

The super price of gasoline crosses the $4 mark again

What do you mean by technical efficiency?

Within these three aspects, we hired a consulting company with the Central University to create test benches and apply comparisons with vehicles with a full tank. Let’s see how many kilometers are covered with 85, compared to a car with the same characteristics, but which uses gasoline of 87 octane. If we manage to reduce gasoline consumption by 1%, this means a reduction in imports, which would save about 30 million dollars a year. There are three scenarios: checking prices to get an average, combination and technical efficiency. Regarding other price offers, we have other conditions for September 16 and 31. With all this we will do matches information to determine the final value. We offer a good plan, something that is not binding by law, but we commit ourselves as a company to give a better product to provide better benefits to citizens.

In your opinion, then, there was no breach of the offer, although it will certainly not come out in September?

When the tender is announced, the companies have only 10 days to make an offer, and after that 35 days for the display to arrive. Our authorities have warned about this. From the beginning, the first window was planned to be the last week of November or until the second week of December. We had to make a technical file before INEN; Also, have authorization from ARCERNNR. Another important thing was to see the structure of the container so that the product would not be contaminated. Even if we had launched in August, this wouldn’t have arrived until the end of September.

So why were they talking about September?

As Petroecuador we have not issued a statement on the date. On the other hand, the minister reported that we are working on that project and that the goal is to have everything ready by September. And then be able to make official launches for import as such.

Do you think that they will be able to carry out this project, despite the fact that this government is already saying goodbye in December, and maybe the oil authorities too?

Regardless of the authorities, this project is essential for the country. This will allow us to meet international standards. In fact, we are one of the few nations that still has 85 octane gasoline. It is the state’s responsibility to have a better product on our market.

You told me that of the total imported gasoline 95 only 30% is intended for super gasoline and the rest for blends. Why is this happening?

No refinery has the capacity to produce gasoline within the octane number we require, nor the required quantity. Throughout Ecuador’s history, CEPE has had a need for imports. It was always mixed, even with ethanol, to improve the octane. In Ecuador, we consume 62 million barrels of clean products and have the capacity to produce 26 million barrels. So we import up to 79% of what is needed. We don’t have the necessary base gasoline.

What octane rating of regular gasoline comes from our refineries?

We have three refineries: Esmeraldas, Shushufindi and La Libertad. The production range is between 62 octane in Shushufindi and Esmeraldas which achieves up to 80 and 82 octane. The average is 70 to 75 octane. So we mix it with ethanol, 80 octane gasoline and 95 octane gasoline. Now our challenge is to use the same budget but improve the quality.

However, some fuel distributors who sell 95 octane gasoline, and some of them who import their own super gasoline, fear that 87 will steal the 95 market. It must be clarified that out of 100% of the gasoline consumed in Ecuador, only 4% has 95 octane . It should be taken into account that many European vehicles can run on 87 octane petrol; That is, many who use super gasoline could migrate.

Which companies already import? And of everything that is imported, how much corresponds to the private sector?

Primax is the only importer; They use the infrastructure and pay us 2.6 cents per gallon. They import 4%, and next year they could increase from 10 percent to 12 percent. Primax is currently the third company in terms of total turnover. They started bringing in part of the ships brought in by Petroecuador, between 15,000 and 20,000 barrels since October last year. By July of this year, they had already delivered their first full ship of 295,000 barrels. They will bring another one in October, and they have five to six windows planned for 2024. This reduces the liquidity pressure on the state-owned company.

Could this mistrust created by a private import company make us rethink this process or will it just happen?

As a technician, I believe that this is an obligation of the state and the need for a vehicle fleet.

Since it is a matter of necessity, can I decide to sacrifice the cash register, that is, buy at a higher price?

The decision of the authorities was to ensure that the subsidies were not increased. That’s a challenge.