MercoPress. South Atlantic News Agency

Argentina to import fuel to ease current shortages

In the next few days the problem will be solved, said Royón

Argentine authorities said Friday that more fuel will be imported to guarantee supplies to the pumps as the ongoing crisis is set to drag on for weeks, potentially affecting the Nov. 19 presidential runoff between Economy Minister Sergio Massa and Liberal Congressman Javier Milei, it was reported in Buenos Aires.

In this scenario, the agency announced that an agreement had been reached during an emergency meeting at the Economy Ministry between Energy Secretary Flavia Royón and the heads of YPF, Trafigura, PAE, and Raízen to import ten fuel ships to meet an unusual “increase in demand”, estimating that “in the next few days the shortages will be resolved”.

In addition, technical stoppages at some refineries will end in the next ten days and production capacity will be increased shortly, it was explained.

Royón also stressed that the country's “record” production has been “affected and complicated” by the inability of the logistics system to deliver the product. Therefore, the government has agreed with the CEOs of the country's main refineries “to import ten ships in the next few days and optimize refining capacity”.

”I have summoned the main refineries in the country to normalize the fuel situation throughout the territory. It was agreed to import 10 ships and the technical stops will end in the next 10 days to guarantee supply and avoid speculation. Subsequently, I had a positive meeting with the executives of the Confederación de Entidades del Comercio de Hidrocarburos y Afines (CECHA), with whom we analyzed the situation of the sector,“ Royón also said on social media that ”increases [in demand] of up to 15% from 2022“ were recorded in recent days, presumably due to greater activity resulting from a long weekend and record figures in tourism and agricultural production.

The business leaders also discussed that in the week before the Oct. 22 elections ”there was unusual consumption, encouraged by the expectation of a devaluation in some provinces.“

Faced with these shortages, Cecha asked the national government ”to take the necessary measures to regularize the situation, adopting all the means within its reach that will allow the oil companies to regularize the supply of gas stations. We all need fuel and at the moment there is not enough to meet demand. A quick solution is urgently needed“. Cecha also noted that petrol stations ”do not interfere in the lack of adequate fuel supply“ and that the shortage problems ”have been deepening lately,“ as ”what began with scattered stockouts in specific regions or areas has rapidly generalized with greater intensity to all products, throughout the country.”

Meanwhile, agricultural guilds such as the Sociedad Rural Argentina (SRA) and the Confederaciones Rurales Argentinas (CRA) warned that “the lack of diesel oil would cause potential losses that producers cannot afford, especially after a historic drought that still continues in several areas”.

“For this reason, the competent authorities must take measures to ensure that the supply is normal and that the production of diesel oil is not affected by the drought,” they insisted.

The Federación de Expendedores de Naftas del Interior (Federation of Gasoline Retailers of the Interior) argued that the reason for this situation was the lack of dollars to import super and diesel oil. Federation President Alberto Boz, estimated that the fuel shortage could last for several weeks. “The crucial point is that there are no dollars to import what we need, which is basically super naphtha and grade 2 diesel oil,” he said.

According to Boz, “There is no quick fix. The problem is finding the dollars to import. The national government is working on it, but there are no magic solutions. And in the middle there are elections. That is why

I believe that until December 10 we will live these stock ruptures,” which resulted in pumping quotas per customer.

Boz pointed out that the country imports between 12% and 15% of the super naphtha consumed in the domestic market, and between 15% and 22% of grade 2 diesel oil. “Local production is not enough to meet demand, which is increased by agriculture and transportation. Although all the distilleries of all the oil companies process the crude oil from Vaca Muerta, it is still necessary to import it,” he said.

In addition, the current price of a liter of super gasoline is the lowest in the last 10 years: around US$0.35 at the unofficial exchange rate, which would explain a surge in smuggling to neighboring countries.