Government meeting with oil companies: fuel prices rise by 4% and there will be an impact on inflation

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The oil companies had agreed with the government on an increase 4% monthly in the price of fuel. It would happen on the 15th of each time, between April and August. Energy Secretary Flavia Royón called a meeting with oil companies on Tuesday to address the issue. A freeze was to come.

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But the increase planned for Monday will finally be carried out on Wednesday. Puma, one of the station networks, will start with this fuel boost from midnight. It will be 4%. The rest of the oil companies are preparing to follow suit. “We were told that there will be increases between tonight and tomorrow”, explain stationers Shell and Axion.

In the market they only consider that YPF has the ability to reverse an increase. “He’s the only one who, in terms of market share, can stop all of this.”swipe a competitor.

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A version of an allegedly official green light for increases was circulating among the tankers. In general, when one brand raises its prices, others follow suit. Only once has YPF bucked this trend and forced others to back down. He was the exception to the rule.

Although Puma is the fourth company by market share (behind the YPF, Axion and Shell brands), there was a greater willingness in the private sector to imitate it than to leave prices alone. “Unless the minister (Sergio Massa) communicates something, fuel quantities will increase between Wednesday and Thursday,” another company said.

“Unless Massa comes out with an ad ‘to curb inflation’, the companies understand that they can apply the aforementioned hikes, which are below inflation,” the refiners say.

Companies continue to believe in the need to do this reset prices. “A 4% increase, with 8% inflation. it’s little”They reason in an oil company that prefers not to give its name. “The average increase of 4% is fictional. Then the increases in some internal provinces end up being much higher ”, the government denies. Maybe there’s a midpoint agreement on that, they speculate in the industry. “So far this year, fuels are up 18% against 32% inflation and a 25% devaluation,” they justified in another brand.

Although economists tend to blame the rise in fuel prices as the cause of inflation, industry experts ensure that cuts about 0.4% of the CPI.

fuel prices they increased between 60% and 122% in 2022. During the first 8 months of this year, the increase will be close to 36%, if the agreement is respected. That’s less than half of the overall inflation forecast for that period.

Two rounds of “fair prices” for fuel have been agreed this year. 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, iImplies a monthly upside 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 more raises.

Accumulated fuel increases for the period January-August 2023 it is between 36% and 37%, if the predictions of the two price agreements announced so far come true. 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 120% per year.

The price of “Super” gasoline is between $175 and $190 in Buenos Aires, depending on the flag. In the case of the super, it’s closer to $225, although there are also fluctuations depending on the brand. The diesel is at $190 and the “premium” at $270. Over the past winter, getting diesel has been a tough task.

“With this gap we cannot pay the wage increases agreed with the union,” they assured the main service chamber of the gas stations.

With this agreement, Energía delegates the responsibility of adjusting fuel prices to the next administration. The oil companies say they agreed to this deal in exchange for tax fixes.

Source: Clarin

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