The devaluation of the peso and increased transfer taxes on oil has had profound effect on the price of gas in the country, with recent announcements stating that both fuel companies will increase their fuel prices between 2 percent and 12 percent.
YPF is set to increase its fuel by 9.5 per cent in the metropolitan area and 8.5 per cent in the rest of the country. Axion has also joined the bandwagon increasing it prices between 10 per cent and 12 percent in line with Shell’s statement on Saturday. The price per liter for super gas will cost AR $33.48, for premium gas it will now be AR $40.58 per liter, and for diesel AR $29.38 per liter. What’s more, Shell also announced over the weekend that it would be raising its fuel prices.
In terms of YPF, the country’s leading fuel company, it aims to divide the prices between the metropolitan area and the rest of the nation – where demand is higher, which leads to increased prices. The price of super gas for the market leader will increase from AR $30.34 to AR $33.34 per liter, for premium gas it will increase from AR $36.42 to AR $39.88 per liter, and ultimately the price of diesel per liter will go up from AR $26.38 to AR $28.89.
This is all because this month the country will see an increase in transfer taxes for fuel (ITC), which is set by the AFIP, Argentina’s tax agency, and also due to the rise of biofuels, which makes up the composition of gasoline, whose value is set by the Ministry of Energy.
On Saturday, YPF increased the price for fuel on average by 2.5 percent. In the case of Shell, the price per liter for super gas increased by 12 percent (AR $30.28 to AR $33.61), premium gas increased by 10.9 percent (AR $36.95 to AR $40.99), and diesel rose by 12 percent (AR $32.73 to AR $36.66).
These prices will stand until the end of this year, when the Ministry of Energy’s scheme to increase fuel prices is annulled.
In order to justify these increases, the oil companies have assured that the local prices will still be delayed in relation to what they consider the equilibrium values. To make their calculations, companies take into account the international oil price, the price of the dollar, domestic price of bio-fuels and the cost of liquid fuels and carbon dioxide.
The increase in fuel prices is likely to put more pressure on inflation, which is already expected to exceed 35 percent this year.