Prices of fuels

In Peru, the prices of fuels are governed by the free market; that is, they are determined by supply and demand, as indicated in Article 77 of the Organic Law on Hydrocarbons.

Our country being a net importer of fuels, where several economic agents participate, the sale prices are determined by free competition, that is, they are established according to their cost of opportunity, which is the price that any economic agent would have to pay to import a barrel from the Gulf Coast of the United States to the Callao Terminal, considering the logistic costs and margins associated with its commercialization, this is known as the Import Parity Price.

Import parity prices

The Import Parity Price is the theoretical value that reflects the costs of an efficient import operation to the Callao Terminal. The structure of the PPI is as follows:

= Base Price or Marker in the Relevant Market
   + Quality Adjustment
   + Freight
   + Insurance
= CIF Price
   + Advalorem
   + Inspections
   + Cost of Port
   + Delay Costs
   + Financial Expenses
= Ex-Refinery Import Price
   + Throughput (storage and dispatch)
   + Commercial Discount
   + Commercial Margin
   + OSINERGMIN + OEFA Aliquot
= Ex-Plant Import Price

Definitions

  1. Relevant Market:
    It is the main reference market for liquid hydrocarbons and biofuels for the Peruvian market because it has export surpluses of products with the quality characteristics required by the local market, geographical proximity and reliable information regarding prices, volumes, inventories, etc.
  2. Base or Marker Price:
    Fuel derived from crude oil marketed in the relevant market with similar characteristics to the local market fuel.
  3. Quality Adjustment:
    Represents the difference in product quality between the relevant market and the local market.
  4. Fleet:
    The cost of international shipping that will be paid by the importer. There are two (02) types of published rates: the first, based on an international scaler known as Worldscale plus the Panama Canal crossing, and the second, a fixed rate "all in" called "Lumpsum".
  5. Insurance:
    Its purpose is to compensate the insured with respect to the loss or damage that may be suffered by the cargo on its journey from the port of loading to the port of destination.
  6. Ad-valorem:
    It is the tax or tribute applied percentage to the CIF value of the fuels that are subject to importation. Currently it does not apply to the importation of hydrocarbons, only in the import of biofuels.
  7. Inspection:
    The inspection of goods in international trade, both at origin and at destination, guarantees the transparency and proper functioning of foreign trade operations, ensuring the conformity of the order according to the characteristics requested in the contract. The service is provided by certified international companies.
  8. Port Expenses:
    Includes the payment of the Terminal Operator's fee for the use of the pier.
  9. Expenses for Delays:
    The payment for overstay of the ships caused by the port closures due to weather effects, among others.
  10. Financial expenses for maintaining inventories:
    Considers the costs of the Letter of Credit and the financial cost of maintaining an average inventory, a safety inventory and the round trip of the ship.
  11. Throughput:
    The storage and dispatch costs based on the contracted strip. Does not consider the royalty payment. This value is adjusted annually based on US consumer price indices.
  12. Commercial Discount:
    A commercial facility included in the Commercial Policy and Discounts of the Company.
  13. Commercial Margin:
    The expected margin in the sale of liquid and specialty fuels, according to market conditions.
  14. OSINERGMIN Aliquot:
    It is the contribution of the companies of the sub-sector hydrocarbons for the work of control of OSINERGMIN.
  15. OEFA Aliquot:
    It is the contribution of the companies of the hydrocarbons sub-sector for the work of evaluation and environmental control of the OEFA.

Structure of list prices with taxes (does not include discounts and FISE)

FuelsList Price PETROPERUVehicle Tax 8%ISCIGV 18%

Petroleum Liquid Gas – GLP

x

 

 

X

Gasohol 97, 95, 90 and 84 RON

X

x

x

X

Diesel B5

X

 

x

X

Diesel B5 S-50

X

 

X

X

Industrial Oil 6 and 500

X

 

X

X

Note: List prices and the Selective Consumption Tax (ISC) are expressed in Soles/Gallon and their value differs for each fuel.