Gasoline prices would rise by about $40 per liter and diesel by about $90 starting this Thursday, October 22, according to Emol. The outlet reported the advance figures from Finance Minister Jorge Quiroz (ministro de Hacienda), who said on Wednesday that the Government is making a "very big effort" to keep the increases gradual.
"We are making a very big effort so that these increases are as gradual as possible within what public finances allow," Quiroz said. According to Emol, the figures he gave match what economists consulted by the outlet had projected.
That brake comes at a cost. The minister said the price containment produced "a fiscal effect on the order of $300 billion in three weeks". In other words, the State is paying out of its own pocket so that the increase at the pump is smaller than what the international market would dictate.
The mechanism behind this is called Mepco, the Mecanismo de Estabilización de Precios de los Combustibles (Fuel Price Stabilization Mechanism). It works as a shock absorber. Every three weeks it adjusts prices so that oil price jumps do not hit consumers all at once. The Empresa Nacional del Petróleo (Enap), the state oil company, will announce the new prices during Wednesday.
Quiroz attributed the pressure on prices to the "war situation" in the Middle East and in Russia, which has made oil more expensive on international markets.
For your wallet, the math is simple. If you fill a 50-liter tank with gasoline, you would pay about $2,000 more than before. The impact of diesel is greater. That increase hits freight transport and can be passed on to the prices of other products.
That is where truckers come in. According to Emol, the truckers' association is consulting its members this afternoon to assess a possible work stoppage. The outlet did not report when the result will be known.
At the same event, Quiroz spoke about the crisis at the Administradoras de Fondos de Pensiones (AFP), Chile's private pension fund managers. He said one of the possible sanctions is "fines on their directors". On Tuesday, the Superintendencia de Pensiones (the pension regulator) opened sanction proceedings against all seven AFPs over investment decisions linked to the drop in fund E, which lost 10.39% in real terms between January and September.
The minister recalled that, before taking office, he and Jorge Spichiger warned about the risks facing the most conservative fund. "We raised three or four times the risks that fund E faced due to rising interest rates worldwide," he said.
He also noted that, starting in April, generational funds will limit the duration of securities at older ages. Duration measures how much a bond's value moves when interest rates change. If it is shorter, older people's pensions are less exposed. The new fuel price adjustment takes effect this Thursday, October 22.
