Because the price of fuels in Nicaragua has increased consecutively during the last 18 weeks, companies dedicated to provide cargo services announce that rates could increase between 5% and 10%.
During 2020 the price of hydrocarbons was considerably reduced, but currently in the international market the price of a barrel of oil exceeds $60, which is similar to the amount reported prior to the covid-19 pandemic.
In a context of health emergencies and falling oil prices, Nicaraguan businessmen are asking the government to take advantage of market conditions and reduce electricity rates by 15 to 20%.
For the Superior Council of Private Enterprise (Cosep), the advantage of buying and storing oil derivatives for electricity generation as soon as possible should be evaluated, and thus taking advantage of the historical lows in the prices of these products.
Because of the fact that in the first six months of the year Guatemala's oil bill totaled $1,440 million, 6% more than what was reported in the same period in 2018, businessmen in the sector project a rise in sales at the end of 2019.
Figures from the General Directorate of Hydrocarbons (DGH) of the Ministry of Energy and Mines (MEM), specify that between the first half of 2018 and the same period of 2019, the amount of the oil bill, which includes the cost of importing oil derivatives such as gasoline, diesel, bunker, asphalt, kerosine, butane, gas, petcoke, among others, increased by $78 million, going from $1,362 million to $1,440 million.
Although in the last year there have been constant reports of falls in the international price of crude oil, the rise registered in the last month represents a risk for a "very sensitive" economy such as the Nicaraguan one.
Between December 21st, 2018 and January 21st, 2019, the price per barrel of crude oil has registered a 16% increase, rising from $45.5 to $52.57, a situation that could alter prices and costs in an economy that has been hit by the political crisis that has affected it since April last year.
Due to the upward cycle of the barrel international price, between January and August the country has bought $1.844 million in petroleum products, 22% more than in the same period of 2017.
Regarding this growth in the import amount, Enrique Melendez, executive director of the Guatemalan Association of Gasoline Dispensers, explained to Prensalibre.com that "...
The Guatemalan government has finally approved the contracting model and promises to launch the bidding process within the next four months.
At the end of 2016 the Ministry of Energy and Mines announced that it was beginning to prepare, at that time, a plan to call a new tenderand grant a concession for the operation of the pipeline, currently in the hands of Perenco, to a new company. Due to delays in the process, in February last year the contract with Perenco was extended for 18 months, meaning that August would be the deadline for the new launch.
Alba Petróleos de El Salvador, daughter company of PDVSA, is no longer importing from Venezuela the fuel it sells in the country, doing so instead from the United States.
EDITORIAL
Removal of market rules in order to achieve political objectives, always has an inevitable expiration date.This is what is happening with the alleged exportation of the so-called Bolivarian revolution, through Venezuela's contribution of oil and its derivatives to economies with apparently similarly minded governments.While it is true that the current Maduro government still has the loyalty in diplomatic terms of some Latin American and Caribbean governments, which has prevented his condemnation through international organisms, in the economic sphere relations with these allies are cooling off without remedy.
Price of gallon of regular gasoline: Costa Rica $3.81, Nicaragua $3.64, Honduras $3.33, Guatemala $3.01, El Salvador $2.99 and Panama $2.82.
From a statement issued by the Ministry of Economy of El Salvador:
The reference prices for liquid fuels in El Salvador (and in Central America) are directly affected by international events, seeing as we are a country that is a net importer and marketer of oil products, for which reason since the start of the year oil prices have risen by about 20 percent after the OPEC and other countries such as Russia agreed to cut production by nearly 1.8 million barrels a day, the OPEC and other Russia leaders will be meeting in late May to decide whether to extend the cuts until the end of this year, in addition as US production costs decline, pressure on other oil producers is intensifying, especially for nations that are trying to maintain prices by reducing daily production, The United States has attacked an air base of the Syrian Government with missiles and generated tension in the producing countries of the Middle East.
Price of gallon of regular gasoline: Costa Rica $3.94, Nicaragua $3.47, Honduras $3.43, Guatemala $2.89, El Salvador $2.86 y Panama $2.70.
From a statement issued by the Ministry of Economy of El Salvador:
The volatility of international prices of products (gasoline and diesel) in the oil market persists, being the main factor affecting reference prices for fuels.It is worth noting that as final consumers we should be aware that the instability of oil prices andtheir fluctuations are permanent factors, making assertions and predictions about future prices unpredictable, however in the current fortnight trends in international prices have been caused by the following events:
The current national accounts methodology could be causing an underestimation of the value and potential of an industry that has become a success.
In his article in Ca-bi.com, Paulo de León objects to the failure to update the Guatemalan national accounts system, resulting in an underestimation of the weight of the sector in the Guatemalan economy, as that system does not incorporate the shift in the energy matrix towards renewable energy.
In the last two years the country which is the Latin American champion in wind energy lost $63 million a year from purchasing wind MWh at $70 and having to resell it at $7.
EDITORIAL
We are in agreement with the need to contribute to the sustainability of human development on this planet, and the need to transform the energy matrix of countries in order to become less dependent on oil, but the balance of the cost of this transformation needs to be adequate, in order to avoid making the kind of mistakes committed by the government of Uruguay.
The decline in global prices is the main reason behind the abandonment of several areas on the part of concessionaires, added to which is confusion around the mining moratorium.
Guatemala went from extracting 9 million barrels of oil in 2003 (a daily average of 24 thousand barrels) to just 3 million in 2015 (10 thousand barrels per day), recording a drop in production of 59.4% in twelve years.
The state run oil company in Costa Rica registered losses above $24 million during the first nine months of 2015, despite having the highest prices in the region.
In the first nine months of 2015 the Costa Rican Oil Refinery lost more than $24 million. The state run company, which has had a monopoly in refining and sale of fuels in Costa Rica for more than half a century, has payroll costs representing 56% of its total expenditure.
Price of a gallon of regular gasoline: Panamá $2,19, Guatemala $2,27, El Salvador $2,29, Nicaragua $2,90, Honduras $3,02, y Costa Rica, $3,74.
From a statement issued by the Ministry of Economy of El Salvador:
Variations in international prices of refined products (gasoline and diesel) over the last few weeks have influenced prices in Central America, allowing El Salvador to be located in second place in terms of the lowest prices of gasoline, and second place for the lowest price in diesel.
Prices of a gallon of regular gasoline: Panamá $2.35, El Salvador $2.37, Guatemala $2.42, Honduras $3.11, Nicaragua $3.13, and Costa Rica, $3.75.
From a statement issued by the Ministry of Economy of El Salvador:
Variations in international prices of refined products (gasoline and diesel) over the last few weeks have influenced prices in Central America, allowing El Salvador to be located first in terms of the lowest prices in gasoline, and second for the lowest price in diesel.