No more weekly variations: petrol and diesel prices will be communicated every 21 days

The project that allows the fuel price stabilization mechanism (Mepco) to issue petrol and diesel price changes every 21 days and no longer weekly, as in force until today.

The Chamber supported the project in the third phase, ratifying all the changes made by the Senate. It was approved with 111 votes in favour, 3 against and 26 abstentions.

Specifically, the amendments aim to clarify the period of application of the percentage adjustments for the calculation of the price of diesel. Therefore, it is stated that these will be in effect between 16 April 2023 and 15 April 2024.

It also increases the figure that will be applied for the calculation between the date of publication of the law and April 15, 2023.

The rules of the project seek to define a broader period of price stability, between ups and downs that may occur.

This will help accentuate the “insurance” profile of the mechanism. This will make it possible to maintain a programming of values ​​for a longer time, a fact which will benefit transport in general, but also the products associated with this situation, such as those sold in a company or a supermarket.

To implement the change in Mepco, the proposal also specifies how the specific fuel tax will be calculated in the different weeks of that period.

Cargo transport

Furthermore, the text has some specific advantages for the freight transport sector. They were agreed between the Executive and the union in the context of the truck drivers’ strike at the end of November.

In particular, the validity of the partial refund of the specific tax on diesel for companies in the sector is extended until 31 December 2023. For this, the following scale will be applied:

  • 80%, for taxpayers whose annual income was UF2,400 or less.
  • 70%, for taxpayers whose annual income has been more than UF2,400 and not more than UF6,000.
  • 52 5%, for taxpayers whose annual income has been more than UF6,000 and not more than UF20,000.
  • 31%, for taxpayers whose annual income has been more than UF20,000.

Together with the above, it establishes the price regime applicable to diesel until April 15, 2023. This will ensure that prices are maintained for 120 days, without changes. Likewise, this rule establishes the mechanism that allows this stabilization.

An applicable transitional regime is then established for the diesel price adjustments that the Mepco operation entails. The period, as mentioned above, is between April 16, 2023 and April 15, 2024. Here a maximum of increases of 0.25 UTM per cubic meter every 21 days is defined.

Finally, it should be noted that the extension of the partial refund benefit will apply to all invoices issued during the 2023 tax year.

For the most part, lawmakers have lifted approval for this project. But they also invited the government to open the discussion on maintaining the specific fuel tax.

Deputy Mauricio Ojeda (IND), in particular, recalled that this tax was born due to specific reconstruction circumstances after the 1985 earthquake. Therefore, its permanence would not be justified.

It has also been argued that rising fuel prices affect the poorest people, who don’t see the benefit of a mechanism like MEPCO, because they see prices rising from week to week.

In criticizing the text, some have questioned whether it derives from the pressure exerted by the truckers’ union after the strike last November, and whether these benefits do not extend to other sectors such as passenger transport. Similarly, in the temporality of its application, considering that currently the price of the dollar and fuels are going down.

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