Private oil companies increased gasoline prices by an average of 27% at midnight on Wednesday. The latest hikes mean fuel prices in Argentina have more than doubled in less than a month, as inflation soars and President Javier Milei kickstarts his government with an agenda of aggressive economic deregulation.

Private firms such as Axion, Shell and Puma had applied increases by Wednesday morning. State-owned YPF has not announced any price hikes so far.

Oil companies increased fuel prices by 30% two days before former President Alberto Fernández left office on December 10, then by 37% three days after President Javier Milei was sworn in. The latest raises bring the total to 126% since the start of December.

The Fernández administration had established a deal to freeze gasoline prices for 90 days between August 18 and October 31. After this, there were two price hikes in November, totalling 25%. 

On Tuesday night, dozens of drivers queued outside gas stations across the country to fill up their tanks before the price increase took effect at midnight.

In Buenos Aires city, a liter of gasoline now costs between AR$702 and AR$944 depending on the fuel type (US$0.80-1.10 at the official exchange rate, or US$0.70-0.90 at the MEP rate).

In November, former Economy Minister and ex-presidential candidate Sergio Massa postponed a scheduled fuel tax hike to stop prices from going up “more than necessary” during a gasoline shortage. The tax was last raised in April 2021.

Non-stop inflation

Inflation, which was already at a three-decade high, has sky-rocketed since Milei’s inauguration. In the last month, food prices have gone up by almost 50% in the suburbs of Buenos Aires, according to the Social, Economic and Citizen Policy Research Institute (ISEPCi, by its Spanish acronym).

Milei has adopted a no-state-interference policy to market prices, made effective with his economic deregulation mega-decree, which eliminated all price-related consumer protection measures.

He also filed a bill of over 600 articles, known as the “omnibus bill,” which is set to be addressed in Congress during the Argentine summer. The bill includes the proposed termination of the “domestic barrel” (barril criollo) system, whereby refiners purchase crude from oil companies for less than the international market price.

It also eliminates export permits, allowing producers to export freely. In the short term, if approved, these measures would put further upward pressure on gasoline prices. Oil exporters support these modifications and hope they will be approved.

Last Thursday, the energy secretariat approved increases of 34.4% in the biodiesel price, 33.6% to sugarcane-based bioethanol, and 28.4% to corn-based bioethanol.

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