Argentine state-owned oil company YPF has made a significant move by increasing fuel prices at the pump by an average of 25%, according to a company source cited by Reuters.
This price hike comes at a crucial juncture for the country, which is grappling with the specter of hyperinflation projected to exceed 180% for the year.
This decision to raise fuel prices precedes the inauguration of President-elect Javier Milei, a far-right libertarian who secured a resounding victory with 56% of the vote in the second round of elections, defeating the incumbent ruling party’s Economy Minister, Sergio Massa.
Milei takes office amid a challenging economic landscape characterized by surging inflation, depleting foreign reserves, and escalating poverty levels.
President-elect Milei has outlined a radical economic agenda that includes implementing what he terms “economic shock therapy.”
This approach entails eventual closure of the central bank, the adoption of a dollarized economy, and substantial reductions in public spending.
Milei’s economic reforms have generated significant anticipation and apprehension among the populace.
Many Argentines are bracing themselves for the tough times ahead, acknowledging that the country’s economic challenges were not solely precipitated by the incoming president.
A citizen, Franco Hit, expressed his sentiments while filling up his vehicle at a gas station in Buenos Aires, remarking, “At some point, it had to blow up.
It’s a shame but there’s no other way, and we’re paying the consequences. These things are inevitable. It is not because of the new president. It’s going to be hard, very hard.”
In line with Milei’s economic vision, his incoming Energy Secretary, Eduardo Rodriguez, has advocated for a free-market approach to fuel pricing.
He believes that fuel prices should be allowed to fluctuate freely without government interference, including indirect control through YPF.
It is worth noting that the Argentine government holds a majority stake of 51% in YPF.
Milei has also made significant personnel changes within YPF, appointing senior energy executive Horacio Mari to lead the company.
YPF holds a prominent position in Argentina’s domestic fuel market and is a key player in the development of Vaca Muerta, a significant source of natural gas and crude oil for the nation.
As President-elect Milei embarks on his tenure, the fate of Argentina’s economy and the success of his ambitious economic reforms will be closely watched, with the recent fuel price hike serving as a prelude to the broader changes expected in the country’s economic landscape.