Fuel goes up at pumps in Argentina, but below inflation

Monday, August 22nd 2022 - 17:32 UTC

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YPF vowed to keep monitoring all the variables involved in the formation of the price of fuel

Argentina's state-run oil company increased the price of fuel at pumps by 7.5% on average Sunday but it remained well below figures in neighboring cities abroad. The accumulated devaluation since the last naphtha adjustment is 16%.

YPF argued the adjustment was necessary due to “the evolution of the variables that affect the formation of fuel prices.”

The price increase will have a greater impact on naphtha, with an average of 8.5% between super and premium, while the increase in diesel will average 6% between grade 2 and grade 3 due to the longer period of time since the last increase in naphtha prices (May 9) and the increase in the price of bioethanol during said period (19%).

The price gap with neighboring countries remained high, which leads drivers to cross the border to tank up, thus causing shortages on the Argentine side, as consumption in the northeastern provinces growing around 30% since 2019 would seem to indicate.

YPF controls over 55% of the retail fuel market nationwide. It has announced that it will continue “to monitor the evolution of the variables that affect price formation, always taking into consideration the particularities of the macroeconomic context of the country and the international reality.”

Although the increase is 7.5% on average, it reached 10% in places such as Còrdoba.

In the last 12 months, the accumulated price adjustment of gasoline is 32% and that of diesel 51%, which results in an average of 41.7%. Meanwhile, biodiesel increased by 6.7% since the last increase on June 16.

Among those “other variables” is the Consumer Price Index (CPI), which reached 71% in July.

“YPF will continue to make its greatest productive and logistic efforts to sustain the supply in the domestic market in a context of sustained historical demand records,” the company said.

The company has also implemented an economic aid plan for the service station network, tantamount to two points of the total increase of gasoline plus diesel oil.