Argentina plans to free fuel prices starting in August

Tuesday, July 3rd 2018 - 07:26 UTC

Full article 4 comments

Argentina will allow fuel retailers to freely set pump prices starting in August, according to an Energy Ministry official familiar with the plan, a move that could encourage badly needed investment in the nation's oil patch but risks worsening sky-high inflation and angering consumers. Read full article

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chronic
Price fixing always works out long term.
Jul 03rd, 2018 - 12:51 pm - Link - Report abuse -1
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DemonTree
I wonder if it'll go as well for Argentina as it did for Brazil:

https://www.reuters.com/article/brazil-cenbank/update-2-brazil-central-bank-slashes-2018-gdp-forecast-after-truckers-strike-idUSL1N1TU0BH

2.6% GDP growth predicted before the strike, 1.6% after. Ouch. Of course, unlike Brazil, Argentina also has a tiny-tiny inflation problem to worry about...
Jul 04th, 2018 - 01:00 pm - Link - Report abuse 0
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Enrique Massot
This will, without a doubt, deepen the currently developing economic recession in Argentina.

The story incorrectly presents the move as an effort of “Macri's pro-business government...to unwind state controls on Argentina's economy.”

In reality, the move aims to give a few large energy corporations free reign to make profits in total disregard of an economy that can't take this sort of recessive measures anymore -- this explains constantly contradictory decisions in the absence of any coherent plan.

That is why Macri's “pro-business” qualification must be understood as “pro SOME businessES.”
Jul 04th, 2018 - 04:26 pm - Link - Report abuse 0
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Zaphod Beeblebrox
Reekie,

“In reality, the move aims to give a few large energy corporations free reign to make profits in total disregard of an economy that can't take this sort of recessive measures anymore.”

So you are saying that these companies will engage in some sort of price-fixing cartel by default. Alternatively, it could encourage healthy competition and more efficient fuel usage.

I'm not sure that the move is pro-oil business because they'd get paid with or without government subsidies. However, it might concentrate their minds if customers start to pay attention to what they are paying. I agree that it will be an inflationary move but it will help the government's finances.
Jul 05th, 2018 - 05:49 pm - Link - Report abuse 0
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