Uruguay: fuel price freeze announced

The government of Luis Lacalle Pou decided to keep the price of fuels frozen in Uruguay during the month of November, despite the fact that a report from advisers recommended an increase in it. The measure will be financed at a cost of US$186 million for the state oil company Ancap.

The measure, promoted by the executive, will extend throughout the month of November with the aim of “continuing support for economic recovery and minimizing the impact on production chains” according to the Presidency statement. At the end of October, the action aimed at containing one of the most relevant prices for the economy was announced last Monday: fuel.

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Despite the oil price closing on the rise, Lacalle Pou denied a price transfer to the consumer, with the help of Ancap financing. The rise (although stable) of the international reference price, admitted the domestic increase that very possibly could be transferred to other prices of the basic basket, colliding with the government’s inflation targets.

Although the Ursea report foresaw an increase in energy, with Ancap’s disbursement the expected margins would be covered (difference of 4.5% for gasoline and more than 7% for diesel with respect to the import parity price). In line with the action, Ancap assured the solidity of its finances (product of the profits obtained during the first half of 2022, located around US$128 million) allowed the freezing to be carried out.

With information from ámbito