YPF announces 1% increase
YPF will raise the average price of its gasoline and diesel by 1% across Argentina starting at midnight, the company announced. The adjustment narrows the gap with competitors that had already increased their prices in recent hours. YPF stated that the update falls under the price buffer scheme it has applied since April, which remains in force due to the ongoing Middle East conflict and its effect on international crude oil prices.[S1][S2][S3][S4]
The company said the buffer scheme is intended to maintain an honest agreement with consumers, prevent volatility from being passed on to local prices, and support demand in a free-market environment. YPF will also continue its micropricing system, which makes specific adjustments based on supply and demand, competition, time slots, corridors and geographic zones, aiming to tailor prices to each market and improve the commercial efficiency of its network.[S1][S3][S5]
Competitors raised prices earlier
Shell, Axion and Puma Energy had already applied increases on Wednesday. Shell raised super gasoline by 2.4%, premium gasoline by 4.7% and higher-quality diesel by 5%. Axion updated its fuel varieties by between 2.3% and 4.2%, while Puma moved between 2% and 5%. With these hikes, the price per liter of gasoline reached around 2,200 pesos and diesel up to 2,300 pesos at various points of sale.[S1][S2][S5]
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YPF, which holds the largest market share in fuel sales, applied the smallest increase. The company accounts for 55% of the retail fuel market. The state oil company had anticipated that some increase could occur due to tension in the Middle East. Its CEO and president, Horacio Marín, had said that if the barrel price settles at US$100, consumers will have to pay that price.[S1][S4][S5]
International crude prices remain high
Oil, the main input for refined fuels, returned in September to around US$105 per barrel internationally due to the war in the Middle East and Houthi attacks on strategic infrastructure in Saudi Arabia. Diesel reached record prices in the United States because of the intensification of the Russia-Ukraine conflict, with damage to refineries. On Friday, Brent crude traded at an average of US$105.5, down 1.3% from the previous close, while WTI operated at US$93.[S1][S2][S4]
In Argentina, with free prices but under a private agreement involving the state through YPF, fuels reflected crude below US$85. Now they have moved to US$88. Some refiners say they collectively forgo up to US$150 million per month due to the difference between the purchase price of crude and its sale at service stations. The buffer made sense for an oil price increase that would not last long, but the perspective now is that crude will remain high even until mid-next year, making it no longer viable to keep holding.[S1][S4]
