MercoPress. South Atlantic News Agency

Caps on fuel prices announced to curb Argentina's inflation

Gasoline went up far below overall inflation

Argentina's Superminister of Economy, Industry and Agriculture Sergio Massa reached an agreement with oil companies whereby fuel joins the list of care-for prices. Hence, the price at pumps may not go up above a 4% monthly ceiling until March, it was announced in Buenos Aires.

The companies participating in the deal with Massa were YPF, Shell, Axion, and Puma.

Massa was joined at the meeting Monday by Energy Secretary Flavia Royon and Commerce Secretary Matías Tombolini. After the encounter, Royon told reporters about the agreement whereby fuels will be part of the Fair Price program for four months with increases limited to 4% in the first three months and 3.5% in the last month.

“There will be a cap of 4% increases in December, 4 in January, 4 in February, and 3.8% in March. This is very positive because it gives predictability in the face of uncertainty,” Royón said.

“It is part of Minister Massa's program to contain inflation. So it was a very productive talk. YPF, Panamerican Energy, Raizen, and Trafigura participated. It is precisely part of the fact that fuel, which is a very important part of the economic life of all Argentines, is also part of the Cared-For Prices program,” she added.

In return, the Argentine State must guarantee access to foreign currency for the companies, especially for the supply of lubricants, in addition to a temporary reduction in taxes on fuel imports in order to guarantee supply for the agricultural sectors, especially during January and February.

On Nov. 3, YPF applied a 6% increase in gasoline and diesel prices, which was followed by the other brands shortly afterward. In the Autonomous City of Buenos Aires (CABA), the increase was 5.9% in gasoline and 7.9% in diesel, slightly above the nationwide average, in a move to reduce the gaps between CABA and the rest of the country.

The yoy adjustment of gasoline was 52% and 74% in the case of diesel, for an average of 62%, while other variables affecting the local economy had higher increases. Fuels went up by far less than other items, such as the National Institute of Statistics and Census (Indec) 76.8% CPI in September.

So far in 2022, gasoline prices have risen between 60% and 70%, while diesel has risen between 80% and 115%, depending on the variety (super or premium), according to surtidores.com.