Although they are waiting for the green light from the Government, Oil companies are preparing to apply a 4% increase in January. Companies are already probing whether they will apply it on the 31st at night (for the early morning of January 1st), or if it will be a day later, on Monday January 2nd.
The increases are part of a deal between the oil companies and the Energy Ministry. The Minister of the Economy, Sergio Massa, blessed it himself. These are three consecutive increases of 4% (December, January, February) and one of 3.8% in March. In this way, companies understand that they are helping the “Fair Prices” program promoted by Economy.
In general, oil companies rotate which one starts with increases. In the past it was always YPF. But, in 2022, it was Raizen (under the Shell brand) and Axion that took that place, followed by the state-owned oil company.
A liter of premium gas costs $150 (less than an official dollar and less than 40 cents at the “blue” price) at official YPF gas stations in Buenos Aires. It is the lowest amount in the country, outside of Patagonia. The rest of the flags charge higher prices and inside become more expensive due to logistics costs.
Common diesel sits at $162. It’s one of the fastest growing products on the year, nearly at the rate of inflation, as it’s up 90%.
Premium gasoline costs $185. In the cumulative year, it’s up 77%, below “common” gasoline, which is up 66%.
Premium diesel ships at $222 and will now top $230. It’s one of the products up more than 120%.
Oil companies have applied seven hikes over the course of 2022. In gasoline they were below the annual CPI, while in diesel they were above that indicator.
The agreement with the government is conditional on the fact that there is no sharp devaluation of the official exchange rate and that the oil companies have dollars for imports. Especially for some products such as diesel.
Mass consumer companies have asked oil companies to adhere to “Fair Prices”. They understand that they could not freeze their products if there were increases in logistics costs.
In order for oil companies to join, the government has postponed fuel tax increases and set up a table on the increases that biofuel producers can apply to them.
The oil industry ended, in general terms, a good year. The results obtained in the wells have been higher than expected and they are experiencing export surpluses. This allows the Government to forecast that, from 2024, the energy trade balance will be very positive.
The amounts of Argentine suppliers are among the lowest – in dollars – compared to those of neighboring countries. From Paraguay and Uruguay they cross borders to supply local fuel tanks, since they cost less than in their territories.
After the worldwide increase in the price of oil, fuel prices have stabilized in recent months. A gallon of gasoline in the US – which in the highest-tax states was worth nearly $2 – is already back to 90 cents.
With the next increase in January, a liter of gasoline is estimated to be less than the dollar at the official exchange rate ($175 at Banco Nación). If you consider an “alternative” price (such as that of “blue” or financial dollars), fuel would be around 50 cents.
Bolivia, Ecuador and Colombia, three hydrocarbon producing countries, have prices similar to those of Argentina (between 50 and 60 cents, at the “blue” exchange rate), as does Brazil, which is also balanced against the dollar. Other neighboring countries, such as Paraguay, Uruguay and Chile, do not have their own production, so they import. Its residents find it convenient to fill up in Argentina and return to their countries.
Source: Clarin
