“I come to make an agreement with consumers,” proposed Horacio MarinCEO and president of YPF by ratifying the information published by this means. “I want to make a fair agreement with consumers. Nobody has to subsidize anyone. Neither we to the consumers nor the consumers to us. Consequently, if the price of international crude oil rises, the price of fuel locally will rise. If the price goes down, we will go down”, he stated.
YPF reported that as of midnight on Tuesday, October 1 The price of gasoline will drop by 4% and diesel by 5% average throughout the country. But at the same time, he clarified that “This decrease will not be directly reflected at the pump, because there is a 3% increase as a consequence of the devaluation and the increase in taxes (1%).”
In short, At the pumps the reduction will be just 1% on gasoline and 2% on diesel.
How much has the price of gasoline and diesel dropped since October?
Today, the YPF super gasoline In the city of Buenos Aires you pay $1,059 per liter, while the highest quality is worth $1,309. While grade 2 diesel is priced at $1,084 and grade 3 at $1,334.
The discounts starting this Tuesday will be between $10 and $13 per liter.
Why are fuel prices falling?
The oil company highlighted that the “YPF effort” It is to reduce fuel by 5% and 4%. “This decision is made, fundamentally, within the framework of a fall in the international price of Brent crude oil, which is part of the price structure of all fuels worldwide,” he justified, as he had anticipated. Energy Report.
The barrel of Brent oilwhich is used as a reference in Argentina, It fell from US$90 to the current US$71 in just two months.
As explained by YPF, in the last eight months a “balance” was found between international prices and local prices at the pump that allows, from now on, that the latter are raised or lowered depending on the value of Brent crude oil and the evolution of local cost components.
“In this way, the company maintains a fair price for its fuels that reflects the conditions of the international and local market and the evolution of costs associated with fuel production,” they stressed.
Why did the price of oil drop from US$90 to US$72?
According to analysts, the price of North Sea oil (Brent) and the Texas WTI plummeted in recent weeks from the records of US$90 a barrel due to the decline in manufacturing activity in China and concerns about a possible recession in the US economy.
Furthermore, days ago the US Energy Information Agency (EIA) reported that Commercial oil reserves fell in the United States, but less than expected by the market. In the week ending August 23, these stocks fell 800,000 barrelsmuch less than the 2.8 million expected by analysts.
But euro zone business activity contracted sharply and unexpectedly in September as the bloc’s dominant service industry stagnated and the manufacturing sector’s slowdown accelerated.
What is going to happen in the future with the price of oil?
Shortly after the collapse from the border of the $90now crude oil has stabilized around US$74 a barrel. It is that the oil prices were boosted last week by the decision of the United States Federal Reserve to cut interest rates by 50 basis points and signal more cuts by the end of the year.
In parallel, the intensification of the conflict in Middle East could reduce regional supply and this situation forces an increase. The Israeli army launched its largest wave of airstrikes against Hezbollah, backed by Iran, simultaneously pointing south of the Lebanon, to the east of the Bekaa Valley and to the northern region near Syria after almost a year of conflict.
“The prospect of Iran entering the conflict represents three million barrels at stake”held Stewart Glickman, Wall Street analyst for the firm CFRA. “And Libya is a million more. And despite that, WTI does not exceed $80, which, for me, is a surprise,” he said.
“The market could continue to react to rising tensions in the Middle East, as clashes between Israel and Hezbollah continue. Growing concerns about a broader conflict disrupting regional supplies of oil could add bullish pressure to the market,” said BDSwiss market strategist, Mazen Salhab.
Source: Ambito
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