The National Government, through the Secretary of Energy, updated the prices of bifuels. This is an increase for both biodiesel and bioethanol, compared to last month, which could be transferred to the value at the pumps prior to the increase planned for next month and after the increase at the beginning of June.
A few weeks after Javier Milei’s administration took office, the first of the increases was ordered, which was between 28.5% and 34.4%; which led to the acquisition price of the biodiesel per ton from $686,986 to $923,590; Meanwhile he bioethanol made from sugar cane was sold at $465,840 per liter, and that made with corn was sold at $463,911 per liter. These are used for the mandatory 12% cut in gasoline.
At the end of January, biodiesel went to $940,334 per ton; bioethanol made from sugar cane was 584,180 pesos per liter; and bioethanol made from corn rose to $536,983 per liter.
Last month, the secretariat in charge of Eduardo Javier Rodriguez Chirillo established $938,540 per ton the minimum acquisition price of biodiesel intended for mandatory mixing with diesel. The May update meant a lower price. However, with regard to the price of bioethanol, increases were applied.
The minimum acquisition price for bioethanol made from corn intended for mandatory mixing with gasoline was set at $570 per liter and the minimum acquisition price for bioethanol made from sugar cane was set at $622 per liter.
In both cases, these values were established “for the operations to be carried out during the month of May 2024 and until the publication of a new price that replaces it.”
Starting June, this Tuesday the new updates were made official. Through Resolution 95/2024, it was established $635 per liter the minimum purchase price of bioethanol made from sugar cane intended for mandatory mixing with gasoline and in $582 per liter the minimum purchase price for bioethanol made from corn.
“The payment period for bioethanol may not exceed, in any case, 30 calendar days from the date of the corresponding invoice,” the regulations clarify.
While, through Resolution 96/2024published this morning in the Official Gazette, the Ministry of Energy established $951,285 per ton the minimum purchase price of biodiesel intended for mandatory mixing with diesel, which once again means an increase after last month’s decrease. The payment period for biodiesel may not exceed, in any case, seven calendar days.
In all cases, the updates will apply to operations to be carried out “during the month of June 2024 and until the publication of a new price that replaces it.”
Being obliged by law to buy biofuels to cut out fossil fuels, Oil companies will see a new increase in their costs since they are an input for their production. On June 1, gasoline and diesel prices increased. The increase was due to the rise in fuel tax liquids (ICL) and to the transfer of the devaluation, which averaged 3.5% percent.
In this way, the super gasoline, which had a value of $870 in the Autonomous City of Buenos Aires (CABA)it became costly $905 per liter. Premium gasoline, for its part, jumped from $1,074 to $1,117.
Regarding diesel, the common version stopped costing $918 and began to be sold at a value of $950 approximately, while the premium version, which cost $1,167, is sold as of today for about $1,196.
However, in seeking to shore up the path of deceleration of the inflation, the Government again deferred the update of the ICL and postponed most of the increase to July. That is why the average increase in fuel is 1.5 percentage points due to the tax component and 2 points due to the slippage of the official exchange rate, in the search that companies have to maintain their constant prices in dollars.
The fuel tax is updated quarterly based on the variation of the Consumer Price Index (CPI) of the Indec accumulated in the previous period. The government of Alberto Fernandez kept it frozen from mid-June 2021 to December 2023.
In May it was necessary to apply an increase in the ICL of 53% due to the accumulated inflation of the last quarter of 2023, which the Minister of Economy, Luis Caputo, had postponed to June and is now being postponed again, and in July another 56% due to the CPI of first quarter of this year. That is why in July the transfer of the tax component to suppliers could be up to 18%, as defined in the latest official increase path.
It remains to be seen what the oil companies will do, but this update in biofuel prices adds pressure that could be transferred to the pumps. In addition, weeks ago the business entities agreed with the workers’ union on a salary increase for staff.
This is a 12 percent increase for the non-remunerative month of May, solely for the purpose of employer charges to the State that will go to basic in July. In this way, a Beach Operator will receive a basic amount of $705,931.02 this month, plus the non-remunerative figure of $84,711, to which the additional amounts must be added if applicable.
The improvement in salaries corresponds to the collective agreements of the Confederation of Hydrocarbon Trade Entities (Cecha), the Federation of Fuel Entrepreneurs of the Argentine Republic (Fecra), the Service Stations Association (AES) and the Federation of Fuel Entities (FEC).
In this way, it is expected that sooner or later the salary adjustment will also be transferred to the prices at the outlet, as has happened on other occasions. It should also be remembered that the national government released fuel prices, so companies could apply a new increase even before the next ICL increase comes into effect.
