The government decided to increase the price of biofuels up to 90%

Trucks, tractors and agricultural machinery in general are the main users of biofuels
Trucks, tractors and agricultural machinery in general are the main users of biofuels

Through a resolution that will be published tomorrow in the Official Gazette, the Ministry of Energy authorized an initial increase of 59% in the price of a ton of biodiesel, which from $ 48,5333 in which it was will go to $ 77,300 initially and will increase accordingly. staggered until it cost $ 92,558 in May, thus completing an increase of 90.6 percent.

This is an increase much higher than inflation, which in 2020 was close to 35% (the Indec data for December is still missing), although it is related to the price of soybeans, the main input for biodiesel, whose international price it rose almost 40% in dollars and 96% in pesos.

Biodiesel, made from soybeans, is used in trucks, tractors and agricultural machinery, while bioethanol, which is produced from sugar cane and corn, is mixed with gasoline and has cars as its final destination .

With which it is discounted that there will be an impact on consumer prices, which will seek to pass on to users the price that the State granted to biofuel producers, in a highly regulated market. The impact on suppliers, market sources told Infobae, would be between 2.5 and 4 percent.

The impact on gasoline would be between 2.5 and 4%, said market sources REUTERS / Ramzi Boudina
The impact on gasoline would be between 2.5 and 4%, said market sources REUTERS / Ramzi Boudina

The producers

In this way, the government responds to the claim of the biodiesel producers who had come to stop their plans in claiming the quasi-freeze throughout 2020, when they only had a 10% increase in the price that the oil companies, according to regulates law 26,093, they must pay for biodiesel that they then mix with their fuels. To mitigate this impact, the “cut” or mandatory percentage for oil companies will be reduced by half in January (from 10 to 5%) and will gradually increase until it returns to 10% in April. In turn, the price of biodiesel will also continue to increase, reaching 90.6% in May compared to the current price.

The measure benefits around thirty SME producers (the large producers, grouped in Carbio, the Biofuel Chamber, are not authorized to sell in the domestic market and are aimed at exporting), among which the companies of the “Bojanich group” stand out. , from Bahía Blanca (Biobin, Biobahía and Bio Ramallo), from Juan Carlos Bojanich, who also has gaming companies and, according to a specialized publication, gained a certain celebrity status in the sector for having been married to Moria Casán.

Last month, the chambers of this sector had encouraged Energía to update prices, a request in which they had the support of the governors of Santa Fe, Omar perotti, and from Córdoba, Juan Schiaretti, concerned about a new plant closure.

Article 1 of the resolution suspends until May 31 the procedure for fixing the Biodiesel acquisition price that had been approved in 2018, during the government of Mauricio Macri, and Article 2 sets the price path for biodiesel that oil companies they must mix with diesel to comply with law 26.093. The price of a ton of biodiesel will be $ 77,300 in January, $ 86,875 in February, $ 89,975 in March, $ 90,300 in April and $ 92,558 in May, when it will complete the increase of more than 90 percent. Article 3 establishes, in turn, that the payment term of the oil companies to biodiesel producers may not exceed 30 days from the issuance of the invoice, and article 4 provides for changes in the “cuts” that must be respected the oil companies. from the current 10% to 5% in January, 6.7% in February, and 8.4% in March, to return to 10% in April.

Compensating effect?

Biodiesel is produced from soybeans
Biodiesel is produced from soybeans

However, the source does not believe that the measure has a “compensatory” effect for corn producers, to whom the government recently closed the export market, since the demand for corn for biodiesel, he said, is “negligible” with relation to the effect of international prices and the demand of sectors such as the polleros grouped in the “Center for Poultry Processing Companies” (CEPA), one of the entities that are members of the Argentine Agroindustrial Council, now viewed with suspicion by some rural entities as Confederaciones Rurales Argentinas, as CEPA companies benefited from the closure of corn exports.

Oil companies, obliged to pay regulated prices, are critical of the regime of Law 26,093, which obliges them to pay biodiesel and bioethanol producers the prices decided by the government. The regime, they say, generates a cartelized offer in a captive market and with a guaranteed price to producers, which the service stations must then transfer to the final consumer.

Another cost of the regime, they say, is that the State stops receiving foreign exchange for the export of corn, soybeans and derivatives, and of collecting taxes on the sale of fuels. According to these calculations, in 15 years, this tax promotion scheme had a fiscal cost of USD 6,000 million and generated a loss of export foreign exchange of USD 1,400 million.

It also remains to see how the countryside, in a deliberative process about how it will respond to the government’s decision to prohibit corn exports, will assimilate this new government measure, which will impact the cost of transportation (trucks) and the use of agricultural machinery.

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