On March 1, the Government is set to implement the second increment in taxes on liquid fuel (ICL) and carbon dioxide (IDC). This tax hike directly influences the pricing of a liter of gasoline and diesel. This is in accordance with the timetable put in place by the Ministry of Energy via decree 107.
The third month of the year will kick off with a fresh hike in the tax on liquid fuels. This increase will be reflected in the fuel prices at the pumps across various oil companies’ service stations. As a result, the cost of a liter of super gasoline will rise by $32.63 from its current value, while diesel will go up by $21.12. This translates to an increment of 4.4% and 2.7% respectively.
The increase could potentially be higher if the oil companies decide to pass on the 2% increase that the official dollar will register in February. This increase is due to the “crawling peg” policy or programmed subbras defined by the Central Bank.
The fourth and final update of taxes, which has been repeatedly postponed since July 2021 by the former administration, will be applied at the end of April and May.
The new tax update that the Executive will apply to fuel taxes will cause the price of a liter of gasoline to surge by an average of 4.4%. The exact increase that the oil companies will apply to the pump prices remains to be seen.
In light of this, if YPF decides to apply a 4.4% increase on the current prices, the cost per liter of super and premium gasoline in the City of Buenos Aires (CABA) will be as follows:
Super gasoline: It will rise from $744 to $777.
Premium gasoline: It will increase from $918 to $958.
Here’s what to expect regarding the fuel tax increases in March, April, and May:
At the start of March, the Government will revise the tax rates on liquid fuel (ICL) and carbon dioxide (IDC), which affect the pricing of a liter of gasoline and diesel.
The schedule of increases is as follows:
The first increase was effected on February 1.
The second increase will be implemented on March 1 and corresponds to the first two quarters of 2023.
The third increase, relating to the third quarter of the previous year, will be applied on April 1.
The final increase, covering the fourth quarter of 2023, will be applied on May 1.
Here’s a look at what transpired with the consumption of gasoline and diesel in January after the price increase:
In January, fuel prices went up an average of 6.5%. According to a recent report from the Ministry of Energy, gasoline and diesel consumption in the first month of the year dropped 5.76% compared to the same month in 2023.
The sales of higher quality gasoline took a significant hit, recording a drop of 22.67%. However, the YPF service station network saw a 2.89% increase in sales due to the price difference. Conversely, Shell’s oil company recorded a 15.51% decline in sales.
