This is the fifteenth increase in fuels which is specified during the management of Alberto Fernandez. In that period, the liter of naphtha superfor example, showed a close rise of up to 130%. In the Premium segment, the rise exceeded 140%. These increases are above the adjustments that had, for example, the gas and electricity rates: since December 2019, gas has risen on average 91% and electricity, 38%. In both cases, it must be clarified that the rates were frozen for many months and progress is being made in an updating scheme with segmentation.
Increase in fuels: impact on inflation
After the abrupt jump it had in March, with the data of 6,7%it is estimated that the Index of Prices to the Consumer had an increase close to 6% during April. The increase in fuelsthey assure, will add pressure to the May indicator.
“The new fit in fuel prices, with its double effect on price dynamics (first and second round impacts), comes to add more gasoline to a monthly inflation that was already driven by the announcements of increases in CNG, expenses, prepaid, domestic service and telecommunicationsamong others,” Santiago Manoukian, an Ecolatina economist, told Ámbito.
“Although in May it should slow down again, we expect inflation to remain high, hindering the recovery of purchasing power and threatening exchange rate competitiveness”, remarked Manoukian, who detailed: “Moving forward, to the strong inflationary inertia the upward revisions will be added to the guidelines agreed upon in the parity (which in cases such as Commerce or the UOCRA are consistent with a monthly average of 5% in the next 9 months), added to the extra fuel that the rises in public services and the greater indexation of the dollar, in a context of little firepower of the control measures in the face of the lack of an anchor to stabilize expectations, a worrying distortion of relative prices and external pressures due to high international prices. A) Yes, inflation in 2022 is on track to be the highest in the last 30 years”.
Along the same lines, Damián Di Pace, director of the Focus Market consulting firm, pointed out: “When there is an increase of this type, it is generally thought in terms of the particular use of the car. But it has greater impact on freight transport, because as soon as the fuel increases, there is an increase in the price lists of goods in the economy. So, in a context in which an acceleration of inflation is seen, it adds a higher level of heat to the variation in prices in the month of May, without a doubt.”
Precisely, in the first quarter of the year the freight transport had an increase of 25%, according to a report prepared by Focus Market through Paetac (First Association of Automotive Freight Transport Entrepreneurs). “The increase in the cost of transportation is added to the correction of relative prices in the economy such as the official exchange rate, public utility rates, fuel, which had been increasing well below core inflation in the last two years. Annualized inflation from today to December, maintaining an inflation of 5%, we would be closing the year between 80% and 90%. it is key that these variables and negative expectations do not take their course so that this does not happenDi Pace remarked.