Argentina to maintain petrol prices in shift for free-market Milei

Argentina’s state-run energy firm YPF SA will keep petrol prices at the pump steady for 45 days in a break from President Javier Milei’s free-market approach as the conflict in Iran adds to inflationary pressures. 

“We’re going to leave prices approximately constant for 45 days,” YPF Chief Executive Officer Horacio Marín said in an TV interview late Wednesday with La Nación. “If the price of Brent goes up or down, we’re going to maintain approximatively constant” gasoline.  

Marin insisted that the price of an oil barrel in Argentina “is free and will continue to be free,” a key detail for oil producers who recall the price fixing of past Argentine governments that discouraged investment in the country’s now booming shale fields known as Vaca Muerta. 

With gas prices up about 20 percdnt in Argentina since the conflict started, Marin also downplayed any notion that this measure for consumers amounted to price controls, caps or fixing. 

Regardless of the branding, it became clear the government-controlled energy giant would take a more interventionist approach. At the start of his Presidency, Milei scrapped all price controls and championed free-market economics even as he’s kept some currency controls in place. 

“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 said looking directly at the camera.

Milei joins the growing ranks of leaders in Latin America trying to contain the economic fall-out of war in Iran as Brent remains above US$100 a barrel. Chile President José Antonio Kast, a Milei ally who took office just last month, is already facing blowback from voters over surging prices at the pump. Brazilian leader Luiz Inácio Lula da Silva stripped out taxes to keep fuel prices in check.  

Inflation in Argentina hasn’t cooled since last May, albeit from drastically lower levels than the crisis levels Milei inherited two years ago. Still, his administration is publicly concerned about slowing economic growth as the libertarian faces the lowest approval rating of his Presidency. 

“What worries me? The speed of the recovery,” Economy Minister Luis Caputo said in a speech Wednesday in the city of Rosario, insisting that long-term the government’s economic strategy will work out.