The oil company Shell, the brand managed by Raizen in Argentina, increased the price of its fuels by an average of 37% in the more than 600 stations it operates in the country. As Ámbito was able to find out, it is expected that YPF, market leader, also applies an increase, after the devaluation of the official exchange rateso the other companies in the sector will join what is established by the market.
From Shell they indicated that the average increase in their fuels reached 37%, which is added to the 15% that it had provided at the end of last weekin the last hours of Alberto Fernández’s government, before the presidential transfer.
In this way, the reference price of super gasoline in the City of Buenos Aires It became $615 as of todayagainst $449 last Friday, which accumulated an increase of around 57% in the last week.
According to private sector sources, other companies will also apply increases. “If Shell goes up, our stock will go bankrupt, and that can’t happen to us again”, they said from one of the most important oil companies in the country. Meanwhile, other service stations anticipated that they will “follow the market” with the increases.
The increases are explained due to the jump in the official exchange rate, which became $800, and the process of price recovery due to the delay accumulated in the last year, due to the price agreements of the previous government in a context of acceleration of inflation. From an oil company They estimated that gasoline was 30% behind, even after last weekend’s increase, but that number was prior to the devaluation.
In this way, the international reference price, which is the super variety, It now had a value of just over US$0.75, below the country’s historical average of between 1-1.1 dollars per liter.
Last Friday, less than 48 hours before President Javier Milei took office, YPF increased prices at its more than 1,600 stations by 30%, after Shell and Axion implemented an average adjustment of 15%.
The price raid that began since the primary elections broke a process of agreed increases, within the framework of the program Fair Prices implemented since December 2022, with monthly increases of 4.5%which generated a delay in updating prices at the pump.
New increases
Despite this new increase, the second in a week, gasoline prices rose more than 60%, so the liter will be around $615, still far from the historic value of 1 official dollar (today at $800).
Cristian Bergmanna consultant and energy expert, considered that there could be new increases: “A new dollar of $800 puts tension on the price at the pump. A rearrangement of prices in the order of 50 to 70% is to be expected.mainly because of the pass through of devaluation.” The thing is that the devaluation implies an increase in the raw material, which is the oil that the refiners buy.
However, it is not expected that the devaluation will be transferred from one day to the next, but LLA sources consider that what There will be a “path” of increases. “They can raise the price to $1 per liter if they want, but they are not going to do it, because they have a market share to take care of,” they considered. Although the refiners notified the Government of the increases, the official response they received was: “There is nothing to notify because the prices from now on will be free.”
The Milei government’s objective is to unify domestic market prices with export prices. That’s why, the Creole barrelwhich is the name used informally for the price that refiners pay to oil companies per barrel in the domestic market (much lower than the international one), It will slowly cease to exist. They would like that “would disappear today”but they know that the export parity It cannot be transferred “overnight.” In LLA they call it “transitional barrel”: They know that this convergence of going from paying US$56 as they were doing to US$75 as they export will not happen overnight.
This price unification, which was initially expected to take at least 18 to 24 months, could be reduced to less than a year. On the one hand, because the economic measures are a “shock”, while the international price of crude oil falls, and the increase in withholdings on exports also “helps” to close that gap.
One of the unknowns in the sector was what will happen to the tax on liquid fuels (ICL), which has been postponed for more than a year, until February 2024, with a delay in the tax component of 156%. Official sources stated that they will not seek to eliminate it, but rather “reformulate” it, so that it serves as a “buffer” to fluctuations in international prices.
Source: Ambito
