In Argentina there is a shortage of fuel: queues at petrol stations

Argentina is experiencing a very serious fuel shortage . There are closed petrol stations and very long queues in those that are still open, especially in urban centers and in the Rio de la Plata area. Part of the problem derives from the long weekend at the end of October, with many citizens who went to fill up before last Sunday's elections, running out of supplies, but it is not just a question of abundant demand, although this has grown by 15%.

The shortage is essentially due to an extraordinary demand that has grown in the last month during which an agreement between oil companies and the state limited the increase in prices by imposing a minimum of control . Fuel prices therefore increased by only 60% in a year, much less than inflation, and this had three distorting effects :

• although domestic oil production has increased, private companies prefer to sell it wholesale and abroad, where margins are much higher, than at retail;

• The national average for gasoline in Argentina is 86 cents at the official exchange rate. In cities near the border there is greater demand for petrol and diesel because foreign citizens cross the border to fill up. Comparing the value of a liter of petrol with that of other countries in the region, it is observed that in Paraguay it costs 0.93 dollars; Brazil, $1.14; Chile, 1.47 dollars and Uruguay, 1.95 dollars, so whoever can crosses the border and fills up in Argentina, sending the system into crisis;

• YPF, the state oil company, which tried to keep prices down further, was unable to obtain enough dollars to purchase the necessary oil and fuel on international markets.

Amid the worsening shortage of petrol and diesel throughout the country, the Secretary of Energy, Flavia Royón, received the main companies in a hurry this afternoon. The government will now allocate dollars for fuel imports in an attempt to solve a problem that, in part, was generated by the state oil company itself and the pricing policies of Economy Minister Sergio Massa. The operation will consume $400 million of the Central Bank's scarce cash reserves, Clarin reported.

Now with these funds YPF has managed to import 10 fuel ships.

Another issue that reduced fuel supply was the technical shutdown of refineries, including the YPF refinery in Ensenada. Royón asked to start again and promised that in 10 days they would all be at work.

“ The refining capacity of the country's main refineries will be increased . In the coming days the shortfalls will be filled ,” Energía said in a statement.

Raízen, which manages the Shell brand, said it was at record processing, while Axion would have the ability to increase refining volume .

As stated by the Energy portfolio, there has recently been an increase in demand, with peaks of 15% compared to last year , to which is added the extra consumption of the October long weekend. They also assure that there is greater activity in the countryside and admit that before the elections people went to fill the tank expecting a price increase or a new devaluation.