October 30, 2023 [Hellenic Shipping News]- Argentina’s government will import 10 fuel shipments to guarantee local supply of petrol and diesel after a recent demand spike and shortages, the country’s energy secretariat said in a statement on Friday.
The measure aims to resolve shortages in recent days that led to long lines at service stations in the country to fill up with petrol as well as concerns among farmers of a scarcity of diesel, key for the upcoming planting season.
“Refining capacity at the country’s main refineries will be increased,” the secretariat said in the statement. “And in the next few days the shortages will be resolved.”
Argentine refineries supply 80% of the local market while the rest comes from fuel imports, which have been delayed due to a painful lack of foreign currency reserves, said Guillermo Lego, executive manager of hydrocarbon trade federation CECHA.
“Local production is not enough, the ships that have to come with 40,000 cubic meters of different products are slow to arrive, and the demand is above what is normal, especially now that we are planting the fields,” Lego added.
The government, looking to tamp down triple-digit inflation, has also frozen the local crude oil barrel price after a 20% devaluation in August. Oil firms sell a barrel of oil to the local market at $56, below the $88 international price.
That can be a disincentive to sell and means firms face making a loss marketing imported product bought at full price.
“The problem is not that the product is not there, the product is there, the issue is that for now only one person puts it on the market,” said an industry source who asked not to be identified, adding this was state oil firm YPF YPFD.BA.
“Supply is complicated. Gasoline is given away (cheap) in Argentina and that generates very significant pressure on supply,” he added.
Farm groups have also said that a lack of diesel could impact the start of planting, key for the country’s major soy and corn crops, which are expected to bounce back after the last harvest was battered by drought.
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