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The update of the fuel tax promises to reheat inflation

The estimate comes from specialists in energy and macroeconomics. The Government analyzes unfreezing the tax within the framework of the discussion about the 0% financial deficit. Greater collection versus overheating of inflation.


The discussion is centered between the need for greater collection and the social cost to be borne by a new price acceleration that could be resumed in February after the rise in fuel prices. It is a price of prices, which is tied to the variation of the dollar, the price of a barrel and the fuel tax. According to Julián Rojo, specialist in macroeconomics and energy, a debated increase at the pump around 25% It would contribute around 1 point to the monthly inflation number, at least within Greater Buenos Aires, 1.5 percentage points in other parts of the country, such as the Cuyo area or Patagonia. “The incidence of the increase in fuel is 2.8 in the CPI within the GBA, but it goes to 5.2% in the previously mentioned areas,” explains the economist. The increase would take the price of super gasoline above $1000.

In any case, once thawed, it would not be a single increase. For Raúl Castellano, president of the Chamber of fuel businessmen, the delay is in the order of 300%. “We have not defined whether this stipulated 25% increase will be applied all at once or in two or three tranches, but The oil companies confirmed to us that they increase on Thursday”, warns the businessman.

The impact on inflation would not only come from an increase in prices at the pump, but also from the impact on the transportation chain. “The rise in fuel generates a cascading increase in other goods and services. The distribution network is primarily by truck and if a portion of that increase is transferred to freight, we will see it in the February CPI,” explains Dante Moreno, economist at the consulting firm EPyCA. Along these lines, economist Joel Lupieri especially warns about the rise in food: “fresh products such as fruits and vegetables “They should have progressive increases, to the extent that it will be more expensive to take them to all corners of the country.”

The increase would be third within the management of Javier Milei: on December 8 they rose by 30% and on December 13 by 37%. Now it is stipulated at 25%. “The most immediate effect is to deepen the dramatic fall in real wages,” warns Federico Machado, from the Policy Observatory for the National Economy (OPEN). The institution considers that an extra point of extra impact due to the increase in fuel plus the impact on the marketing chain would take inflation in February from 14% to 17%. Likewise, for Moreno, companies will not be able to fully transfer the increases, since the firms are concerned about being in a low-profit segment, after the drop in sales. Food companies could solve this problem by “segmenting the increases between their different marketing lines, first, second and third brands.”

The flip side of this increase is its potential collection, within the framework of a fiscal discussion that the Government promised to settle in the National Congress. With the chapter that in the Omnibus Law referring to the strategic composition of the 0% financial deficit removed, the ruling party analyzes alternatives outside of the reduction in spending that will allow the setback to be overcome. In this sense, Nadin Argañaraz, head of the Argentine Institute of Fiscal Analysis (IARAF), highlights that the real value of the fuel tax fell by 85% between December 2018 and the same month of 2023. With its update, the Nation could put together extra resources for 0.37% and the provinces for 0.15%. But it can be expensive: for Rojo, freezing the tax “generates a great loss of revenue due to not being updated” such that, in real terms, less than 8% of what was paid in 2017 is paid. To return to those values, “it would be necessary to add almost $350 per liter of gasoline/diesel.”

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