In the vicinity of a massive movement of people for the Holy Week holiday in Guatemala, which begins this Friday of Sorrows, the prices of a gallon of super and regular gasoline accumulate an increase of Q4 from January to date, equivalent to 13 %, and no one guarantees that the rise will stop in the coming days.
The most recent adjustment was in Q1, which became widespread over the course of this week, reported the Guatemalan Association of Gasoline Retailers (Ageg). Meanwhile, the gallon of diesel remains unchanged.
The hydrocarbon sector is also waiting, given that last Monday the Government declared the National Interconnected System in an “Emergency Situation”, although the supply of fuel for this season is guaranteed, considering that there is inventory and dispatch availability. in the storage terminals located on both coasts, according to official sources.
Data from the General Directorate of Hydrocarbons (DGH) show that on January 1, the average price of super gasoline was Q30.44 per gallon in the self-service mode and for regular gasoline it was Q28.95. This week, the national reference price was Q34.46 (super) and Q32.96 (regular), official statistics indicate, although service stations are offering the product for around Q34.99 (super). and Q33.49 (regular) in full service mode.
However, in several departments higher prices were observed, as in the cases of Chiquimula Q35.01 (super) and Q33.52 (regular); Huehuetenango, Q35.10 and Q33.60; Quiché, Q34.92 and Q33.33; Sacatepéquez, Q34.60 and Q33.12; and Quetzaltenango, Q34.72 and Q33.26
Regarding the movement of people during the following days during Holy Week, fuel consumption and their prices, the director of Ageg, Enrique Meléndez, said that each situation is very relative.
“Consumption increases at service stations that are located on the main roads of the country where the greatest traffic flows to tourist places. But in the metropolitan area mobility is reduced and the stations that serve heavy transport that is restricted during Easter, reduce their activity.”
Fausto Velásquez, manager of Uno Guatemala – licensee of the Shell brand in Guatemala – said that, in the local market, price competition between marketing companies also influences, apart from the cost of the product for service stations.
While the Minister of Energy and Mines, Víctor Hugo Ventura, agreed that in recent days there was an approximate increase of Q1 in prices in the local market, although “I would think that they are normal movements influenced by supply and demand to global scale.”
But he stated that there is no geopolitical event that can really push the barrel of oil up, but there are small adjustments “that are seasonal in nature.”
What explains it?
The executive director of Ageg confirmed that during this first quarter, the increases have been concentrated in gasoline as a result of the behavior of the international price of oil, impacted by the increase in demand due to the fall in inventories (reserves) in the United States. .
The executive mentioned that at the beginning of the year stability and even price declines were expected, but geopolitical factors have been having an impact, as have the decisions of the Organization of Petroleum Exporting Countries (OPEC) regarding voluntary production cuts. with the intention of reducing the supply of crude oil so that prices rise in the international market.
He recalled that the average price of a barrel of oil began the year in a range of US$60 to US$70, but then rose until it reached US$82 for WTI – Texas intermediate oil – which is the reference for Guatemala.
Velásquez agreed with all of the above and reiterated that Guatemala is an importing country that is subject to what happens abroad and the imbalances between supply and demand for crude oil at a given time, apart from the problems that persist in global supply chains. .
For example, he mentioned that the situation in the Suez Canal (attacks on merchant ships) has generated an increase in freight costs, which is worsened by the drought that affects the Panama Canal and the consequent reduction in the passage of ships. . Furthermore, massive consumption is beginning in the United States due to the summer trips that millions of people make by land, which increases the internal demand for fuel.
Scenarios
During the March session last Wednesday, the Monetary Board (JM) decided to maintain the Leading Monetary Policy rate at 5% and Johny Gramajo, economic manager of the Bank of Guatemala (Banguat), explained that the external environment was taken into consideration. the performance of the global economy, including oil prices.
In this sense, he confirmed that an upward trend has been maintained and the price spot It has been around US$83 per barrel of WTI, which is the reference for Guatemala, which means an increase of 16.5% once morest the closing price on December 31, 2023, which was US$71.75.
Regarding the forecasts, he assured that it is very complex, but the base scenario is US$78.42, with a ceiling of US$88.67 and a floor of US$68.17. “The most likely scenario is precisely that of the center (US$78.42), higher than the average price observed on March 19 (US$76.74).”
Meanwhile, David Casasola, analyst at the National Economic Research Center (Cien), stressed that fuel prices obey a value chain that begins with the price of crude oil, the refining that converts it into gasoline and diesel, transportation , distribution and sales.
“As it is a chain, the transmission of one increase to another is not only explained by the price of oil, but also by the aforementioned logistical costs and therefore it is a bit difficult to predict the magnitude of the increases. In the end they are reference prices.”
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