Amid the uncertainty about a possible new increase in fuel prices, what was expected happened: motorists gathered in long lines in front of the pumps. from petrol stations to fill the tanks.
It happens that this Wednesday at midnight expiration of the extension which applied the management of Alberto Fernandez to the tax on liquid fuels (ICL) and carbon dioxide (IDC). Therefore it is calculated that if the extension is rejected, The impact on consumer prices will be between 10% and 11%. In this case, the liter of Super petrol would go from 699 to 775 dollarswhile the value of the prize would rise from 862 dollars to 956 dollars, again taking the values seen in the city of Buenos Aires.
This tax burden was last updated in the second quarter of 2021 with the goal of keeping prices from skyrocketing. In return, the government asked oil companies to raise prices below the consumer price index (CPI).
Then, in November last year, the then Minister of Economy Sergio Massa again postponed the transfer of the tax to the pumps arguing that “in the case of consumption taxes, and given that the demand for liquid fuels is highly inelastic, the ” The changes in taxes are practically transferred directly to the final fuel prices.”
Given the imminent extension, from February 1st, Word of the price increase has mobilized motorists towards petrol stations. However, there has been no official confirmation on the price change yet.
Due to the failure to update the tax, the Treasury is estimated to have stopped collecting approximately $3.6 billion since 2021. Omnibus law. Oil companies discount the ability to pass the tax on to consumer prices without even waiting for the Government to publish the provision in the Official Journal. In one of the oil companies they estimated that a liter of diesel and gasoline could increase between 62 and 91.50 dollars respectively.
But they also assume that, after two and a half years, they won’t be able to move it all at once. Especially at this time when, due to drastic increases, demand is decreasing. In January alone, sales fell by 20%, according to estimates from CECHA, the Confederation of Hydrocarbons and related marketing bodies.
Estimates of the impact that the application of the tax could have differ between different sources. For example, for economist Nadin Argañaraz, director of the Argentine Institute of Fiscal Analysis (IARAF), the price increase would be 25%.
This would mean bringing the fixed sum to around $175 per litre.. In official dollars it would go from 0.95 to 1.2 dollars. For the Nation it could entail additional resources for 0.37% of GDP and for the Provinces for 0.15% of GDP.
This tax, according to an IARAF report, “has a shared nature, therefore it affects the income of the Nation and the provinces plus the CABA”.
Taking the province of Cordoba as an example, the economist underlined that “considering the weight of each tax on the final value of super petrol in the city of Córdoba, we observe that the tax burden is currently 24%. If fully updated due to inflation the value of the tax, the total tax burden on the final price of gasoline would be 39%,” he estimated.
Source: Clarin
