Cutting biodiesel in diesel was reduced from 10% to 5% in 2021, harming companies that produce the biofuel.
Given the shortage of diesel that the country has suffered since the beginning of the year, the government will raise the cut of biodiesel in fuel. This was announced Wednesday by President Alberto Fernández on his trip to Santa Fe, a province that brings together most of the production companies.
As industry leaders confided to Clarín, for local SMEs (the only segment that participates in the local market) the mandatory cut will go from 5% to 7.5% up by 50%, with the novelty that this percentage will remain fixed.
However, national companies are demanding that the cut be increased to at least 10% because they currently work at half their capacity. It should be remembered that the new Biofuels Law, promoted by Máximo Kirchner and approved in 2021 by the National Congress, established the reduction of the mandatory cut from 10% to 5%. And depending on the context, it could drop to 3%.
In turn, the government will open another marketing channel for biodiesel exporting companies, which currently do not participate in the domestic market, where the cut will reach 12.5%. In any case, oil companies will not be forced to buy from them if the value is higher than that of imported diesel, which is now around $ 1,200 per m3.
This measure will last two months – July and August – but there are also chances that it will last until September, depending on the fuel supply.
The export industry was recently asked to increase the cut to 20% because they assured them that they could replace more than one million tons of imported diesel.
The latest report from the Argentine Federation of Commercial Freight Entities (FADEEAC), proved this Already 19 provinces are experiencing diesel supply problems, 14 of them in critical condition, including Buenos Aires. And given this circumstance, the prices paid in various areas of the country exceed 200 pesos per liter.
In this sense, Claudia MolinaExecutive Director of the Argentine Biofuels Association, he warned that, given the imminent price increase of diesel that is expected at the pumps in the coming days, oil companies could “blame” biodiesel.
As he explained, the price of diesel at the pump is much lower than in other places in the world. This leads, she added, to oil companies importing far less than they should. He has calculated that 2 million m3 are missing, without considering the amount of diesel fuel used for energy, which this year will exceed 3 million m3.
“Since the measure of the increase in the value of diesel is taken late, at a time when the cutting with biodiesel is about to increase, it gives rise to oil companies claiming that the increase is due to the increase in the cut, and therefore they leave the product in front of the public, “he said.
Meanwhile, the liaison table asked for demonstrations on the routes during the first week of July, asking for a concrete and real response from the national authorities in the face of the lack of diesel.
“No one is responsible for this situation, and in the face of this we hear a long chain of justifications and explanations from public officials who ensure the existence of financial resources for a prompt regularization. Days go by and none of this, on the on the contrary, it gets worse, “they warned in a recent statement.
The ruralists have highlighted that the agricultural sector consumes 3.8 million m3 of diesel, 28 percent of the national demand which represents over 3,500 million dollars a year, with consumption peaks in two periods: April-June and October- December.
“The management of both the Executive and Legislative Powers must give priority to what is urgent in order not to slow down agro-industrial production and the generation of foreign currency in Productive Argentina”, they remarked.
In turn, the Córdoba Federal bloc of national deputies presented a bill on Monday in which propose to raise the diesel cut with biodiesel to 20%as an alternative to cope with the ongoing crisis due to lack of fuel.
The initiative, signed by the Cordovan Carlos Gutiérrez, Ignacio García Aresca and Natalia de la Sota, provides for the modification of the reduction of the biodiesel content in the mixture with diesel or diesel fuel established by Law 27.640, to raise it from a minimum current of 5% up to 20%.
Stefano Fuentes
Source: Clarin
