They are betting that fewer dollars will come out of energy imports from August

The outflow of dollars for energy imports has complicated the amount of reserves available in the Central Bank. Were more than US $ 6,600 million in the first half of the year. Although this pace has continued in July – it will exceed US $ 1,000 million – the new management of the Economy will find a more relieved outlook.

In Energy they consider the total imports for this year will reach $ 8,000 million and this already almost no energy will have to be brought in from outside for the rest of the year. They claim the average July temperature was lower than expected, so more imported energy was needed, but that August comes with a more benevolent thermometer. For this reason, with the already planned purchases of LNG (liquid gas) and diesel, there would be no need for new fuel shipments.

Enarsa (Argentina Energy) e camesa, the wholesale administrator of the electricity system, were the companies that needed the most dollars in the first half of the year. The first, which carries LNG (liquid gas converted into gas) was about 3,000 million dollars, while Cammesa was about 2,000 million dollars.

Both were doing recent “reprogramming”. They changed the dates on which the agreed imports are delivered, in order to take advantage of some changes in international prices of products.

Since the Russian invasion of Ukraine began, the prices of energy products have skyrocketed. LNG, which Argentina imports when the cold starts, went from $ 8 per million BTU (the sector’s unit of measurement) to more than $ 40 when the war broke out.

In June, Energía Argentina (formerly Enarsa) bought 11 ships from $ 25 per million BTU, the lowest amount of LNG since March. Russia has decided to further limit gas exports to Europe, so the price of LNG has risen again both in those countries and in Asia. The local energy management wanted to take advantage of this situation and offered to cancel three “charges” that were due to arrive in August.

As LNG demand escalated, the traders who had sold those three ships to Enarsa not only failed to charge for these imports – a total of US $ 156 million – but also awarded it a “premium” of $ 46. 8 million dollars. It’s because traders can place those boats in markets that will now pay you more than Argentina.. Europe today pays $ 42 per million BTUs for that gas.

Enarsa and Cammesa have been evaluating since the beginning of the year when it would be convenient to buy diesel or gas, based on the international price of these products. In March, when diesel was cheaper, Cammesa anticipated purchases of this fuel. In July, when LNG went down, Enarsa went ahead with operations.

Cammesa also rescheduled the arrival of three diesel and two fuel oil ships that were due to arrive in August and have been postponed to September. There will be $ 2.2 million in savings.

Just as there were exogenous factors that complicated the country and forced it to pay for more expensive imports, there was also foreign aid on other fronts. Brazil, which in 2021 was experiencing complications in the hydraulic generation, has solved the problem. In 2022, that power generation resumed and was supplying electricity to Argentina in significant quantities.

“What comes from Brazil has a double advantage. On the one hand, Brazil does not charge it, but demands that Argentina subsequently return the equivalent electricity when you have E the cost of powering the thermal power plants with energy from Brazil is half that of using fuels such as diesel ”, they explain to Cammesa.

Brazil is seeking to strengthen its electricity supply in August. Argentina has to give it back in times when the local demand is not as high (for example during the spring).

Agustín Gerez is the head of Energía Argentina and responsible for LNG imports. Sebastián Bonetto is the general manager of Cammesa, the wholesale administrator of the electrical system. Both coordinate with Federico Basualdo, Undersecretary for Electricity. Officials lived in tension with the former Minister of Economy, Martín Guzmán.

The disagreements concerned the timing of imports. The Kirchnerists asked Guzmán to anticipate them (so as not to validate the upcoming price increase), while the former minister preferred to see the evolution of reserves and decide month by month.

The first gas purchases were made at an average of between US $ 35 and US $ 45 per million BTUs. Enarsa’s strategy was to wait for these amounts to come down and he succeeded. In the second acquisition, he paid 12 ships as he had paid 8 cargoes in a previous round.

In July, the payments of imports from the energy sector totaled $ 1,965 million in the month, recording a 117% and 50% year-over-year increase over the previous month, in line with the seasonality of imports in the sector, “according to the Central Bank.

In the first half of the year, energy imports amounted to 6,609 million dollars. That’s $ 4,328 million more than in the same period in 2021.

“Fuels and lubricants” became 84.5% more expensive, while the imported volume increased by 57%.

In dollars, this item “increased 189.7% ($ 4,328 million) primarily due to increased purchases of manufacturing fuels and lubricants, particularly diesel, liquefied natural gas and gasoline, excluding aviation,” according to the Report. INDEC.