Executive Decree No. 308:
Codified Regulation for the Regulation of hydrocarbon products price
By Executive Decree No. 308 of June 26, 2024, the President of the Republic of Ecuador, Daniel Noboa Azín, repealed the hydrocarbon products price Regulation issued by Executive Decree No. 338 of the year 2005 and issued the Codified Regulation for the Regulation of hydrocarbon products price(hereinafter “Regulation” or “Executive Decree”), which sets new prices for low-octane fuels Extra and Extra with ethanol (Ecopaís). The Executive Decree came into force at 00:00 on June 28, 2024.
The terminal sale prices of the following fuels remain unchanged: avgas, diesel, artisanal fishing gasoline, diesel for the electrical sector, fuel oil for the electrical sector, fuel oil for other dispatch points, asphalt cement and industrial asphalt, diesel for the tuna sector, and other fisheries.
Below are the most relevant changes of the Executive Decree:
On the price of fuel in the aviation segment:
- It is added that for any use of Avgas by internationally or nationally registered aircraft, the sale price from the terminal to the end consumer will be defined by each actor in the marketing chain. Previously, this price only applied to the “private use” of aircraft.
On the price of fuel in the automotive segment:
- Starting June 28, 2024, the retail price at the pump for Extra gasoline and Extra with ethanol will be set at USD $2.722/gallon until July 11, 2024; an increase of USD $0.26/gallon.
- The Hydrocarbons Regulation and Control Agency is instructed to calculate and publish the terminal and retail prices at the pump for Extra gasoline and Extra with ethanol in the automotive segment, based on the formula detailed in the Regulation, by the 11th of each month. These prices will be effective from 00:00 on the 12th of each month.
- The formula includes a price stabilization mechanism to protect the end consumer from international price fluctuations and aims to ensure that the price does not increase by more than 5% or decrease by more than 10%.
- It is determined that the prices of gasoline with an octane rating higher than 85 RON cannot be lower or equal to the prices of Extra gasoline and Extra with ethanol for the automotive segment and will be defined by each actor in the marketing chain plus applicable taxes.
On the price of Liquefied Petroleum Gas (“LPG”) for domestic, vehicular, and agro-industrial uses:
- The reference to the “maximum price” for the retail sale of a 15-kilogram cylinder of LPG for domestic uses at LPG distribution depots is eliminated. The Regulation sets the price at USD $1.65.
- The reference to the “maximum margin” for the commercialization of LPG for vehicular use is eliminated. The Regulation sets the commercialization margin at USD $0.130000, excluding Value Added Tax (“VAT”).
- It is clarified that the retail price of vehicular LPG for legally registered taxis and the agro-industrial sector will be the result of the sum of the price per kilogram at the terminal plus the commercialization margin, plus the applicable taxes on each kilo sold to the end user.
On the price of natural gas:
- It is clarified that the natural gas from the Amistad Field dispatched by pipeline for commercial use will have a price of USD $1.786087. Before the Regulation, this value applied only to economic activities such as manufacturing, hotels, restaurants, and school feeding programs.
Other reforms:
- It is stipulated that for products without a commercialization margin, each actor in the marketing chain will develop their own calculation methodology for determining the retail prices of petroleum and natural gas derivatives from the terminal to the end consumer.
For more information, please contact us at the following emails:
Rafael Valdivieso: rvaldivieso@bustamantefabara.com
Gustavo Almeida: galmeida@bustamantefabara.com
Bruno Pesantes: bpesantes@bustamantefabara.com