Argentina's state-run oil company YPF announced a price increase of around 9% in the price of fuel at pumps as of Wednesday, with 2 additional percentage points in the case of premium products.
YPF's decision comes after almost ten months of keeping prices unchanged despite the steady devaluation of the Argentine peso against the US dollar and the country's galloping inflation in addition to the international rise of crude oil.
Every time YPF announces a price increase, the other companies are expected to follow suit shortly afterwards.
YPF issued a statement explaining the decision had been taken “in order to sustain its growth plan for 2022 in a context of financial prudence and within the framework of the evolution in recent months of certain local and international macro variables.
The company also said that after this adjustment, it will continue to monitor the evolution of the variables that affect price formation, taking into account the particularities of the country's macroeconomic context,” which is to be understood as new increases in the near future.
The Government of President Alberto Fernández had decided to freeze the price of fuel at pumps as the mid-term elections loomed over, but it was about time to reverse that, now that subsidies have to be reduced to cut public spending following negotiations with the International Monetary Fund (IMF).
YPF's decision was reportedly driven by a devaluation of 11.35% since May 2021; an inflation of 29.18% (according to the projection of the BCRA-REM); an increase of 16.07% in the price of ethanol, 46.61% in that of biodiesel, and 31% in Brent, amid a strong recovery in fuel demand.
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