There are two biodiesel plants in La Pampa. “The truth is that we are losing money with this price,” said one of the manufacturing companies.
The government has formalized a 20 percent increase in the price of biodiesel after 27 plants claimed higher costs. The Chamber of Regional SME Producers of Biofuels (Cepreb) points out that this is insufficient because “it doesn’t even cover devaluation”.
There are two biodiesel plants in operation in La Pampa: Enresa in Catriló and Pampa Bo in General Pico.
Biodiesel plants buy soybean oil, which accounts for 85% of the cost, in dollars but then sell their production in pesos.
The manufacturers of biodiesel, which saves diesel oil (5 percent), had demanded an increase of 30 percent. “The truth is that we are losing money with this price,” said one of the manufacturing companies.
Cepreb had warned that the 27 plants in Entre Ros, Santa Fe, Buenos Aires, La Pampa, and San Luis would be shut down, putting about 2,000 direct jobs at risk.
“Following the findings of the Chambers, in which most of the biodiesel producers in the sector are represented, regarding the increase in the cost of production of this product in the context of the current macroeconomic context, it is necessary to replace the prices established “Occasionally by Decision No. 602/23 of the Ministry of Energy that biodiesel should still be marketed in August 2023 until a new price replaces it,” says decision 694/2023 published in the Official Journal on Wednesday.
Although the increase is 4% below what SMEs are asking for, the industry believes it’s still a good number. As of August 22, biodiesel was $361,672 per tonne; now it’s $434,006 per tonne.
The jump in depreciation impacted most of the inputs used by the industry but was larger in the value of soybean oil. Since the official dollar was $350, the cost equation changed.
The Department of Energy said the new price is valid until replaced with a new value. Biodiesel is intended for mandatory blending with diesel at a rate of 7.5%.
“We understand that the increase in the price of biodiesel has an impact on the pump. In any case, we assume that the impact is minor and that if the biodiesel plants are not producing, Argentina will have to import diesel to be able to supply it.” Import diesel used to be able to produce biodiesel here for cutting,” said Federico Martelli, CEO of Cepreb.