Changes in the Hydrocarbon Market

In Nicaragua, a reform to the Hydrocarbon Supply Law was approved, which allows thermal generators to "freely" import fuels derived from hydrocarbons.

Friday, May 31, 2019

In relation to the approved reform of urgent character, Patricia Rodriguez, expert in energy, explained to Elnuevodiario.com.ni that "... it is not clear what will be the role of the Nicaraguan Company of Petroleum (Petronic) nor why the refinery of the company Puma Energy will stop producing full oil to generate electric energy."

See "Petroleum Oils: Imports up to September 2018

Rodriguez added that "... generators (of electricity) will be able to freely import their fuels, but Petronic is going to "manage" the reserves as if it were a regulatory entity. It could be interpreted that way: You can import from where you want, but through me'". See article in Elnuevodiario.com.ni "Why will the refinery in Nicaragua stop producing full oil".

From the National Assembly statement:

May 29, 2019. The National Assembly approved today a reform to the Hydrocarbon Supply Law which allows thermal generators to freely import fuels derived from hydrocarbons to ensure the proper functioning of basic public services to the population such as energy and pumping drinking water for human consumption.

The reform of the Law submitted with urgent procedure by the President of the Republic, Commander Daniel Ortega, states that the electricity generation matrix is currently made up of 50 percent thermal generation, which requires the State to guarantee enough and permanent reserves of fuel for its operation.

According to the Law, "all contracts for the supply of petroleum derivatives that Energy Generators have in the country, will be assumed by national or international suppliers that ensure the supply of them in the same or better financial conditions and quality than those currently in force in order to protect the final tariff of consumers.

In addition, it establishes that the Nicaraguan Energy Institute must approve such contracts for purposes of their recognition to be transferred to final customer tariffs. Since Petronic is also a company, it must carry out the pertinent procedures and guarantee enough and permanent reserves of fuels to allow the proper functioning of basic services for the population, including drinking water, electricity and transportation.

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