The oil companies were eagerly waiting to increase their product prices. However, the national government has decided to postpone the increase in fuel tax until March, directly affecting the value of gasoline and diesel. The Executive had planned to unfreeze this tax burden, but through decree 107/2024, published in the Official Gazette, the increases in the amounts of taxes for fuels were established. The taxes set for the first, second, third, and fourth quarters of 2023 had become outdated.
The government has established that the increase in the first and second quarter of 2023 will have an effect for gasoline without lead, virgin gasoline, and diesel as of March 1 of this year. Meanwhile, the other increases are scheduled for April 1 and May 1. The Ministry of Energy, led by Eduardo Rodríguez Chirillo, had already announced that it hopes that the path of “sincerity” in fuel prices will occur gradually after the strong increases accumulated in recent months.
The values of the taxes had become outdated, and the decree argues that the effects of the increases in the amounts of taxes have been successively deferred until various dates. The update mechanism for fuel taxes is based on the variation in the Consumer Price Index (CPI) from Indec for the previous quarter, in line with the regulations in force since 2018.
In the Autonomous City of Buenos Aires, YPF prices mark $699 for a liter of super gasoline, $862 for premium gasoline, $736 for super diesel, and $938 for premium diesel. These amounts contemplate the strong increases of the last two months, with an average jump of 155 percent. Although the official premise is the liberalization of prices, correcting all the delay implied a direct effect on inflation amid the increases in other regulated services and, consequently, on the weakened pockets of consumers.
This effect has already begun to be felt in fuel consumption, with sales falling between 10 and 15% since December. Part of it is explained because the price was more in line with the international price and demand at the border crossings decreased. Another calculation that the refiners will have to make will be added to the liberation of prices. The 2% monthly devaluation of the official dollar, the increase in the international price of oil, and the path proposed by the Government towards the internal import parity price will all have an impact on the total increase, estimated to be between 10 and 15 percent.
Image Source: www.infobae.com
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