Tuesday, June 25, 2024

ECONOMY | 26-10-2023 13:49

Argentines queue for fuel as FX shortage strands tankers at sea

Growing lines at the pump and darkened gas stations at night are tangible signs of a fiscal crisis spiralling out of control.

Drivers in Argentina are dealing with long lines at the pump and completely closed gas stations as the government’s dollar shortage strands ships at sea that are waiting to import fuel.

Scenes reminiscent of Venezuela in recent years have surfaced across Argentina recently with cars around the block attempting to fuel up at stations. Jorge Ferro, a 42-year-old consultant in Buenos Aires, tried to fill up his tank Wednesdsay at an Axion gas station in the wealthy Recoleta neighborhood, but attendants told him they were out of “super” and could only offer 4,000 pesos (US$11) of premium gasoline.

“When I told them I was going to go to another station, he told me that all the nearby gas stations were closed,” Ferro said in a phone interview. 

The growing lines at the pump and darkened gas stations at night are tangible signs of a fiscal crisis spiralling out of control. Argentina’s Central Bank is running out of dollars to pay importers, with inflation near 140 percent and a recession looming. State-run energy giant YPF has three tankers waiting with gas and diesel for import, but can’t offload the fuel until foreign suppliers BP Plc and Gunvor are paid, according to two people with direct knowledge of the matter.

YPF and Gunvor declined to comment. BP PLC didn’t respond to a request for comment. Two of the three ships, named Pacific Blue and NCC Nasma, are anchored in the Río de Plata closer to Uruguay’s coast, according to data compiled by Bloomberg. YPF imported six percent of its gas for cars in the second quarter of this year, according to its most recent earnings call.

Election uncertainty is another big driver behind commuters’ headache. Before the October 22 general election, some gas stations suspended sales as customers tried to stock up on gas, fearing a sharp currency devaluation that looks delayed for now. Economy Minister Sergio Massa faces off against outsider candidate Javier Milei in the definitive run-off vote on November 19. Even after the vote, some stations say they’re entirely tapped out.

Argentina’s dollar scarcity is leaving YPF unable to pay for gas imports for now. The retained cargo has a volume of 120,000 cubic metres, which represents seven percent of monthly gasoline sales in the country, or about US$150 million, one person said. Argentina doesn’t have access to international capital and is struggling to comply with a US$44-billion agreement with the International Monetary Fund, its only major source of financing.

Fuel supply is also pressured by regulation: gasoline prices are fixed until October 31, while a fuel litre at the pump goes for about 40 cents in Argentina, the lowest level in Latin America behind Venezuela and Ecuador, one person said. Argentina imports 32 percent of its fuel: 20 percent of its diesel and 12 percent of its super gasoline. The problem has been worsening for a week and especially in the provinces further away from the nation’s capital.

by Ignacio Olivera Doll, Bloomberg


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