Argentina registers fuel tax increase and its impact on prices is expected

The Argentine drivers They expect from this Friday a new increase in the price of fuelsanother in the endless list of increases that Argentina will experience in March, in the midst of a serious inflationary situation in the country and a decrease in the purchasing power of salaries.

The update of the Tax on Liquid Fuels (ICL), defined by the Federal Administration of Public Revenues (AFIP), will surely impact the price of fuelswhose rise, on average, is expected to reach 4%.

He fuel consumption in Argentina fell after the strong price increases since last December, increases that will continue under the policies of the new President’s Government Javier Milei for the hydrocarbon sector.

The Executive of Milei carries out a liberation of the repressed prices of the economy and, in the case of the fuelsseeks to take them to levels more in line with international markets and more profitable for the companies in the sector.

According to various sources in the sector consulted by EFE in February, the demand for fuel in the gas stations It fell almost 10% in January, except for a slight increase in YPF.

The decline in consumption had already begun to be felt in December, with a cut of 7.8% compared to November, according to data from the Argentine Energy Institute ‘General Mosconi’.

In a context of very high inflation (254.2% year-on-year) and loss of purchasing power of salaries in Argentinasince the increases in joint negotiations are far behind the increase in the CPI, consumers cut their charges at gas stations after the strong price jumps recorded in December, January and February.

Fuel prices have a strong impact on the costs of freight transportation, thermal electricity generation and agricultural logistics, among other activities, and, therefore, have a strong impact on the formation of prices of the economy in general.

This new increase is added to the one that, since the beginning of the management of Mileilast December 10, have experienced the rates in prepaid medical services, in public transport (buses and trains) and in taxis, as well as the elimination of subsidies in energy (electricity and gas).