State-run oil company YPF has implemented further decreases in its oil and gas prices starting Monday, January 7. Gas prices have dropped nationwide by 1.2 percent on average, but the figures vary significantly depending on the country’s region. While in some provinces it may decrease as much as 3.2 percent, the metropolitan area of Buenos Aires – where prices are lower – will see a reduction spanning between 0.5 and 1.5 percent.
This is the second drop in two months, the first one – between 1 and 1.5 percent – announced by the company on December 3, 2018.
In terms of prices, YPF has announced that the price per litre of nafta Super in Buenos Aires will drop from AR $37.21 to AR $36.99. While, Infinia (the company’s premium brand) fell from AR $43.35 to AR $42.89 (which implies a cut of 1.06 percent).
With this decrease, according to YPF, fuel in Argentina is among the cheapest in the region (US $1.04), behind Uruguay (US $1.70), Chile (US $1.26), Brazil (US $1.12) and Peru (US $1.08).
The decision follows an abrupt reduction in the international price of oil, which lost a third of its value in the last quarter of 2018. After hitting US $86 per barrel in October, the Brent Crude Oil index hit US $50 in December and currently stands at US $58 per barrel.
However, oil companies explained that prices were not proportionally reduced because they lagged behind the real exchange rate during the better part of 2018, a result of the abrupt 103 percent devaluation the Argentine peso went through between April and September. Despite increasing prices by more than 70 percent, only now, they say, they are making up for their losses.
Moreover, companies had to implement a national tax, something that prevented them from further reducing their prices – and in fact would have made them increase them if the value of oil had not dropped.
It seems fuel is the only thing going down these days in Argentina, considering that last week the government approved a series of nationwide price increases, in the first quarter, throughout the public service sector, a move strongly suggested by the International Monetary Fund. Most notably, a raise the price of electricity by an average of 55 percent; gas by 35 percent; and public transport fares by 40 percent.