Argentina’s state-run energy firm YPF SA has decided to maintain petrol prices at the pump for a duration of 45 days, diverging from President Javier Milei’s free-market strategy, as the ongoing conflict in Iran exacerbates inflationary pressures. “We’re going to leave prices approximately constant for 45 days,” stated YPF Chief Executive Officer Horacio Marín. “If the price of Brent fluctuates, we will strive to keep gasoline prices approximately constant.” Marin asserted that the price of an oil barrel in Argentina “is free and will continue to be free,” a crucial point for oil producers who remember the price fixing of previous Argentine administrations that hindered investment in the country’s currently thriving shale fields known as Vaca Muerta.
With gas prices rising approximately 20 percent in Argentina since the onset of the conflict, Marin also minimized any suggestion that this measure for consumers constituted price controls, caps, or fixing. Irrespective of the branding, it became evident that the government-controlled energy behemoth would adopt a more interventionist stance. At the beginning of his Presidency, Milei eliminated all price controls and advocated for free-market economics, although he has maintained certain currency controls.
“To the consumer, I’ll say it to the camera, I’m going to help you – excuse me, YPF is going to help you, it’s going to maintain prices stable,” Marin stated while addressing the camera directly. Milei aligns with the increasing number of leaders in Latin America attempting to mitigate the economic repercussions of the conflict in Iran, as Brent continues to trade above US$100 a barrel. Chile President José Antonio Kast, an ally of Milei who assumed office only last month, is encountering backlash from constituents due to rising fuel prices. Brazilian leader Luiz Inácio Lula da Silva eliminated taxes to maintain stability in fuel prices.
Inflation in Argentina has remained elevated since last May, although it is significantly lower than the crisis levels that Milei faced two years prior. Nonetheless, his administration expresses public concern regarding the deceleration of economic growth as the libertarian encounters the lowest approval rating of his presidency. What concerns me? The pace of the recovery, Economy Minister Luis Caputo stated during a speech on Wednesday in Rosario, emphasized that the government’s economic strategy will ultimately yield positive results in the long run.