The return of the “Creole barrel” of oil was established this Tuesday through the publication of a decree published in the Official Gazette. Companies must meet a series of requirements related to maintaining the level of employment, investments and restrictions on the exchange market.
It was decreed that until the end of 2020, “deliveries of crude oil made in the local market must be invoiced by the producing companies and paid by the refining companies and trading entities, taking as a reference for the Medanito-type crude oil the price of 45 dollars per barrel ”.
At Official bulletin it was clarified that this price “will be adjusted for each type of crude oil by quality and by loading port, using the same reference, in accordance with the usual practice in the local market.”
During the term of this measure, the production companies must maintain the levels of activity and / or production registered during 2019, “Taking into account the current situation of contraction of local and international demand, both for crude oil and its derivatives, as a result of the effects of the COVID-19 pandemic”, was explained.
In this sense, the Government referred to a “consensus framework” between the business sector and employees so that, in addition to complying with the “maintenance of existing contracts” with regional service companies, “they must maintain the plant of workers ”they had as of December 31 of last year. This medium reported that The agreement was reached with the approval of YPF, the companies and the unions.
On the other hand, the Ministry of Productive Development will control that companies comply with the Annual Investment Plan that the Government requires by decree. In addition, taking into account the sharp rise in cash with liquidation (CCL) in recent weeks and its indirect pressure on the price of the dollar, the Executive Power made it a requirement to access the Creole barrel, “the producers will not access the exchange market to the formation of external assets will not acquire securities in pesos for their subsequent sale in foreign currency or transfer of custody abroad ”.
In Article 3, the Government established that the refiners and trading entities “must acquire the total demand for crude oil from local producing companies”, and that “in the case of integrated companies, if the purchase of crude oil by On top of their own production and that of their partners, they will make these purchases with parameters similar to those of 2019, taking into account the quality of crude oil required by the refining processes in each case. ”
Neither may they carry out “import operations of products that are available for sale in the domestic market and / or for which there is effective local processing capacity.” The portfolio led by Matías Kulfas will be in charge of reviewing the scope of the measure, and even modifying crude oil prices quarterly. While the Ministry of Labor, Employment and Social Security must follow the evolution of the level of activity, efficiency and labor productivity of the hydrocarbon industry to verify that the requirement to maintain work sources and productive efficiency is met.
On the other hand, and as expected, the Government decreed the freezing of fuel taxes (unleaded naphtha, virgin naphtha and diesel) until October 1. With this particular point, from the Executive they seek to maintain the prices that motorists pay in the pumps, since the price of the liter of gasoline that currently governs was set when the barrel was trading well above the $ 45 that was set to cost the Creole barrel. While the consumer price should not go up when taxes are frozen, it is not presumed to go down either.
Finally, in article 7 it was established that certain merchandise must pay an aliquot of export duty, according to the following values of the “ICE Brent first line”: Base Value: 45 dollars per barrel / Reference Value: 60 dollars per barrel. Regarding the international price of oil, on the last business day of each month, the Ministry of Energy will publish the price of the Brent barrel, considering the average of the last five prices published by the “Platts Crude Marketwire”. The Government will evaluate the average prices of the days elapsed in the current month and will compare them with the current average price. If there is a difference of more than 15% between the two, it will set a new price, which will be applicable from the first following business day.
In cases where the international price is equal to or less than the Base Value, there will be no export withholding; while if the international price is equal to or greater than the Reference Value, the export duty rate will be 8%.
The Executive Branch clarified that all these provisions will be null and void if the Bren price exceeds $ 45 per barrel for 10 consecutive days, “considering the average of the last five prices published by the” Platts Crude Marketwire “.