Government rises petrol prices in wake of Saudi Arabia attack

The government authorised on Wednesday a four-percent increase in petrol prices, almost a month after it ordered them to be frozen for 90 days as part of a bid to tackle inflation.

The increase, which will come into effect Thursday, is a reversal of the temporary freeze and is another minor blow to President Mauricio Macri's re-election hopes. In addition, it hiked the price of a barrel "recognised to" domestic oil producers by 5.58 percent.

The Finance Ministry attributed the decision to "the international volatility of the price of oil derived from the attack suffered by Saudi Arabia's oil infrastructure," in a press release. "These events led to an unforeseen and significant situation of price increases that inevitably impact on the production, marketing and normal supply of fuels in our country."

World crude oil prices rose 15 percent on Monday to almost US$63 per barrel after two drone strikes hit refineries in Saudi Arabia on Saturday, which hindered its production. Since then, however, prices have cooled to US$58.10 per barrel, though they remain above pre-attack levels.

On August 14, in the wake of the president's defeat to opposition Peronist hopeful Alberto Fernández in the PASO primaries, the Macri administration announced several economic measures, which included the freezing petrol prices for 90 days.

Inflation is projected at 55 percent for this year, one of the highest rates in the world.

– TIMES/AFP/BLOOMBERG