Uruguay: Citing efficiency, report promotes fuel pricing

International consultancy CPA Ferrere has published a study, called “The price of fuels in Uruguay”, which reveals that there was an overcharge in the price of fuel in the country in 2016 to the amount of US$415 million.

The study states that “Adopting price alignment mechanisms at parity with import [prices] would be desirable in order to avoid restrictions on competitiveness and avoid detriment to consumers.” One of the concrete actions would be to allow the free importation of fuel, ensuring supply under competitive conditions at international market prices.

The action would involve replacing the national monopoly granted to Administración Nacional de Combustibles, Alcoholes y Portland (ANCAP), perhaps with a concentrated market or even with a private monopoly. In addition, the study says, “free importation does not necessarily ensure competitive prices for consumers,” and might also present risks to the financial viability of the ANCAP refinery, whose processes could fall below the minimum efficient scale in a competitive scenario.

Finally, the report highlights the importance of strengthening the regulatory agencies, aimed at defending the welfare of consumers.

Full Content: El País

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