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Each cylinder costs $117,000. A billionaire costs for his Enap project for low-cost gas.



With no distribution chain for end customers, the final cost rose to $117,000 per cylinder.

of National Oil Company (ENAP) Had to assume the cost to a millionaire for a pilot project that would make it affordable for vulnerable families We offer liquefied gas (LPG) at low prices.

Nearly a year after the effort began, confidential documents revealed the millionaire’s expenses that state-owned enterprises had to bear. distribution system, This increased the number $591 million.

According to figures maintained by Enap, each cylinder is worth $98,000. And add value added tax (VAT) Up to $117,000.

Of this last amount, however, $84,000 corresponds to distribution costs, slightly over 85%.

therefore, Of the $591 million the project cost, $507 million went to distribution. This includes $158 million for shipping the cylinders, plus a contract with Fabián Robuschi y Cia. Limitada (Erifor) to build space for mounting and storing the cylinders. .

This is documented in a precedent contained in one document. Official letter sent to the House of Commons by Energy Minister Diego Pardo. what was revealed by The third.

As detailed by the Secretary of State, the average sales price is $15,000 per unit, representing a 35% discount off the regular price.

But for state-owned enterprises, the costs were different. Because, as we reported, we didn’t have a distribution chain for end customers. The final cost increased to $117,000.

“The greatest weakness detected occurred in the distribution department to the end customer. Given the distance from the bottling plant and the difficulty of reaching the consumer, the cylinders will need to travel long distances, adding to distribution costs,” Perdow said.

“Generally speaking, Enap concluded that the space in which the company could compete and generate economies of scale was in pre-distribution activities, such as inspection, filling and storage,” he added. rice field.

To this end, “a new business model has been developed to sell LPG produced in our own cylinders through retail distributors, which we intend to become wholesale LPG distributors,” added Pardow.

In this sense, the report states that “this new model has been developed in line with the recommendations of the National Economic Prosecutor’s Office, while ensuring competitive neutrality, to enable retail distributors to offer better prices to the end consumer.” , we expect to achieve more competitive prices.” . “

Distribution costs will be borne by the government, and transfer to customers will be excluded for the time being.

“In accordance with the Department of Energy’s direction, this item will be covered by the provision of resources to cover these costs and will be billed to the portfolio’s budget,” the official letter said.

Recall that Enap was commissioned by the Department of Energy to develop an initiative that benefits 40% of the most vulnerable households in San Fernando, Ciguayante and Quintero.

The program aims to benefit 3,000 households from cadastral titles created and provided by the Department of Energy, Free Municipal Associations, and Municipal Associations of Gas at Fair Prices, based on the Department of Energy’s Social Registry. I was there. development, society, family.

The program was supposed to run from July to December 2022, but the state-owned company decided to change plans.

First, Enap developed a new business model to sell LPG produced in its own cylinders from retailers, establishing itself as the fourth largest wholesaler in the market. Competes with Lipigas, Gasco and Avastible.

The initial goal was therefore to reach a commercialization of 300,000 cylinder loads of 15 kg, with 60,000 cylinders initially available. That’s ten times his number earned in the pilot program.

However, the figures presented by the companies, especially the distribution costs, forced them to rethink their model, and they decided to target the wholesale market from now on.

This was pointed out by Enap General Manager Julio Friedman said: He said the beginnings of this model, based on prudence and responsibility, will continue throughout the sales process.

“We started with a very cautious and limited model. We have acquired 55,000 cylinders on top of last year’s cylinders and will grow with the addition of new distributors,” he said. explained.

“We sell gas at the same price to all customers, regardless of size, and we will continue to do so,” said the general manager of the state-owned company.

Source: Biobiochile

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