More profits in fuel? EPCOL rejects, but does not “hand in the fire”

” Não there is an increase in margins,” said the Secretary-General of the Association of Portuguese Fuel and Lubricants Companies (EPCOL), António Comprido, in the margins of the presentation of the study “Operational and regulatory irregularities in the National Petroleum System”.

Questioned as to whether the difference between the evolution of the oil quotation and the prices at the supply stations would be related to an increase in profit margins, EPCOL’s head rejected this reading.

“It is not because of the behaviour of national market agents that prices are not falling with the pace that we would all like them to go down,” said António Longido, adding that the position of the association is “based on facts, numbers, it is not on perceptions or beliefs”.

According to EPCOL’s Secretary-General, the weekly reports of the Energy Services Regulator (ERSE) on the pricing structure do not indicate relevant changes in the retail component.

“The margin that is there retail is practically the same, there’s a difference of one or two cents, something like that, and by chance I think it’s down instead of up,” he said.

António Longido also said that the association regularly analyzes market developments and found no signs of abnormal behaviour.

“We have not detected […] any abnormality regarding the evolution of margins, so there is no one taking advantage of the situation to do so,” he said.

The person responsible, however, pointed out that the association talks about the average market behavior and that it cannot respond to the individual commercial policy of each operator.

“If you tell me if I put my hands on the fire by all the people who sell fuels in Portugal I can’t put it, I’m always talking about market behavior in medium terms,” he said.

António Longido explained that the price paid by the consumer at the stations mainly reflects the international quotation of refined products, such as gasoline and diesel, and not directly the raw price.

“The price of crude cannot be directly related to the price of the pump,” he said, defending that it is different markets.

According to EPCOL’s manager, in recent weeks the crude price has declined, but refined products have not followed this decline at the same pace due to constraints on refining capacity and lower availability of fuels in international markets.

The Secretary-General of the Association pointed out as relevant factors the effects of the war in the Middle East, attacks on Russian refineries by Ukraine, restrictions on Russia’s export of diesel and the seasonal increase in gasoline consumption, notably in the United States.

“There is a shortage of refined products and hence their price is not keeping pace with the decline of the raw material,” he said.

The statements arise after the Minister of Environment and Energy, Maria da Graça Carvalho, announced in parliament that the Government asked the National Entity for the Energy Sector (ENSE) to analyze the evolution of fuel prices, and later a “deep” study to ERSE, considering that they were not going down at the same rate as they had gone up.

António Comprido considered that the analyses requested by the Government “make perfect sense”, but argued that doubts should be addressed above all to ERSE, as it is the entity with market supervision skills.

“You, Minister, if you have doubts, have every right and duty, even as a political responsible, to have what is going on investigated,” she said.

Nevertheless, it insisted that the explanation for price developments is outside the national market.

“Our response is very simple: it is not for reasons of the functioning of the national market that the price of fuel in the pump is not keeping pace with the decline of raw, it is due to the behaviour of international markets,” he said.

António Comprido considered that “the vice of the Minister’s reasoning” was “to want to directly link the price of the pump to the price of the crude,” stressing that “this is not how things work”, since consumers buy gasoline and diesel, not crude oil.