He increase in fuel prices at the pump, whose process began at the end of last year with the assumption of Javier Milei, generated a strong collapse in demand and left prices in Argentina above neighboring countries such as Chile, Bolivia, Paraguay and Brazil.
In a context of contraction of real wages, there was a decrease in the Demand for gasoline and diesel during the first months of the year. However, over the last few months the increase in the price of fuel at the pump has below the pace of variation in domestic prices led to an improvement in the local market measured in constant currency, according to a report by the consulting firm Economía & Energía.
“The real fall in fuel prices over the past few months has certainly contributed to the partial recovery in demand in May. In turn, the improvement in the harvest compared to last year explains the increase in demand for diesel by the agricultural sector,” the analysis indicates.
Gasoline prices in dollars
In the first half of 2024 The price of fuel at the pump was, in real terms, 12% higher than the same period last year. However, in June they are 20% below the month of January.
Following the recomposition of fuel prices at the pump in Argentina, valued at the official dollar, they remained in the median of the region in the case of gasoline and among the highest in the case of diesel.
By case, Gasoline in Argentina is at 1.13 USD per liter in July, surpassing Brazil, which has it at 1.07 USD. The most expensive in the region continues to be Uruguay with 1.94, followed by Chile and Mexico.
Where the difference is most noticeable is in diesel. Of the five countries, Argentina moved from fourth to second place, with a litre in July at US$1.23, just 9 cents behind Uruguay, the most expensive country in the region.
This is how Nicolás Arceo’s consultancy analyzes it: “After the recomposition of the price of fuels at the pump in Argentina, the same ones valued at the official dollar remained in the case of gasoline in the median of the region and among the highest in the case of diesel fuel.”
Sharp drop in gasoline sales
Regarding sales, in May Gasoline fell 6.6% year-on-yearwhile Diesel rose 1.7%explained by the improvement in the harvest, after a drought in 2023.
The biggest drop in sales occurred in grade 3 gasoline, the “premium” versions, which in the accumulated year of 2024 verified a 22% decrease compared to the same period last year.
In any case, the rise in some prices in the economy over others shows another distortion. Beyond the increase in fuel prices both in Argentina and in relation to the region, The price at the pump in June was 20% higher in real terms below the month of January 2024.
“Over the past few months, the increase in the price of fuel at the pump below the pace of variation in domestic prices led to a progressive cheapening of the same in the local market measured in constant currency,” the report explained.
Source: Ambito
