Argentine governments have a propensity to adopt economic measures hostile to the majority of the population in years that they are not electoral except in the periods in which elections are held. The price of fuels is proof of this trend. In 2022 they increased between 60% and 122%. During the first 8 months of this year, the increase will be close to 36%.
There was no election in 2022. The amounts have risen almost to the rate of inflation and, in some cases, even further. Premium petrol was up 80% and diesel, which has been in shortages for several months, was down between 100% and 120%. Namely, until when they exceeded the 2022 annual inflation, which was 94.8%.
The outlook is different for this year. Two batches of “fair prices” for fuels have been agreed. The first was between December 2022 and March 2023. A monthly correction of 4% and the latest one of 3.2%. The second batch of increases, from April to August, provides for a monthly decrease of 4%, which will take place every fifteenth day of each month (April, May, June and July). In August, when the open primary elections (PASO) are held, there will be no increases.
The cumulative fuel increase for January-August 2023 is between 36% and 37%. Although it is not possible to determine what inflation will be in those months, analysts estimate an increase in the cost of living that will exceed 110% per year.
With prices below inflation, a backlog is generated. Costs (oil, refining, employees) lag behind the evolution of sales. Economists often warn that “distorted” prices often lead to complications when it comes to regularizing them. that trend It is also observed in energy (electricity and gas tariffs, for example) or the official change, which is postponed.
With this agreement Energy delegates responsibility for price adjustments to the subsequent administration of fuels. The oil companies say they agreed to this deal in exchange for tax fixes.
“With this gap we cannot pay the wage increases agreed with the union,” they assured the main service chamber of the gas stations.
“Although we believe that the program implemented between the Government and the oil companies gives a certain predictability, establishing a path of contained increases; this puts the sector in check, which survives in a context of generalized cost increases, prices intervened by the state and joint ventures above inflation”, they warned.
“With an expected fuel increase of 16% (in four months) we cannot meet the 30% increase corresponding to the parity adjustment in any way closed with workers, for the first half of this year,” they warned.
“This policy, carried out between the government and the oil companies, and of which we are not a part, despite our claims, is unfair to the thousands of stations that support the sale of fuel throughout the country,” they assured.
an electoral resource
In any case, this administration’s choice to postpone price increases in election years has already been almost a constant in all governments. In the mandates of Cristina Fernández de Kirchner, it was done systematically. There were hikes in 2012 and 2014 (bringing fuel prices to dollar levels not seen since the 1990s), but great care needs to be taken in election years (2013 and 2015).
In 2013, some increases were implemented shortly after the ruling party lost the legislative elections. The main executioner of the Victory Front (at the time the electoral name of Kirchnerism) was Sergio Massa, the current Minister of the Economy. It was imposed in the province of Buenos Aires.
Even the administration of Mauricio Macri has resorted to this expedient. In 2018, a non-election year, pump increases were 60%. In this way they exceeded the annual inflation of that year, which reached 47.6%.
In 2019, with the presidential elections, the government asked the oil companies to freeze fuel prices for three months. The companies refused. The executive paralyzed prices by decree for 90 days (June, July and August). The measure was not enough to improve Cambiemos’ electoral chances, which lost the primary.
In any case, the Government has insisted on that path. He allowed for a 4% raise (at the time it was $2) for after the election. And the oil companies kept the amounts in September and October, again with the idea of not contributing to inflation. Despite improving from the primaries, Cambiemos lost the general election to the Frente de Todos.
Source: Clarin
