EconomyFinancialInternational gasoline prices begin to yield along with crude...

International gasoline prices begin to yield along with crude oil

The international price of gasoline has started a slight downward trend after a significant rise registered after the escalation of the armed conflict between Russia and Ukraine.

Yesterday, Wednesday afternoon, imported gasoline delivered to the east coast of Mexico – where the main marketers in the country are supplied – was sold at 15.22 pesos per liter. The fuel reached its maximum price last Wednesday, when it was sold at 19.15 pesos per liter, the highest price registered by OPIS, a reference price agency for fuels owned by Dow Jones.

Despite the drop, the import price of fuel accumulates a rise of 29% since the beginning of the year. In a year-on-year comparison, the increase is even greater, 58%. During March of last year the average price of fuel was 9.60 pesos per liter, in the first 15 days of this month the average is 15.20 pesos per liter, according to OPIS data.

The price of gasoline has followed the trend of the international price of oil. The fuel reached its highest price on the same day that the main mixtures registered their highest price in the markets. That March 8, Brent crude closed at 127 dollars per barrel and West Texas Intermediate (WTI) at 123 dollars per barrel, their highest prices since 2008.

The price of gasoline has followed the trend of the international price of oil. The fuel reached its highest price on the same day that the main mixtures registered their highest price in the markets. That March 8, Brent crude closed at 127 dollars per barrel and West Texas Intermediate (WTI) at 123 dollars per barrel, their highest prices since 2008.

And now the downward trend in the international price of oil has contributed to a drop in the price of gasoline. Yesterday Brent and WTI closed at 98 and 96 dollars per barrel, respectively, leaving behind the trend above 100 dollars that they registered after the beginning of the Russian occupation of Ukraine.

The international price of the molecule To this are added the logistics costs, the profit margin of the service stations and the different tax charges from the Ministry of Finance, which are currently not being applied in their entirety to avoid a drastic increase in prices. In recent weeks the reference price has increased its percentage in the total price fixation.

The nervousness of the markets regarding a probable shortage of crude oil has not ceased, but the latest confinement measures in China after a new outbreak of Covid-19 in the country, the shortage of buyers and the expectations for the decision of the Federal Reserve of the United States to contain inflation paid for a drop in the price of commodities .

But the decline in recent days may not be long-term, analysts say. The armed conflict in Eastern Europe and the economic sanctions against Russia will continue to serve as the main determining factors in the price of oil and fuels.

Generally, the increase in the reference price of gasoline is not immediately reflected in how it is sold to the public, mainly explained by the inventory turnover of the different participants in the chain, explains Daniel Rodríguez, associate director at OPIS.

But while prices are skyrocketing on fears of an even bigger spike in the price of the molecule, prices are slowly falling as traders try to recoup investments meant to buy expensive inventories.

“In general, increases tend to be faster because retailers know that when they are going to have to make an inventory change it is going to be more expensive, so they are going to have to maximize income to have enough cash flow for the next purchase and a Once prices drop, players are going to try to recover the money they put in that inventory,” says Rodríguez.

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