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October 23, 2014
Friday, May 2, 2014

Fuel increases lead the way in a new month packed with price hikes

Petrol stations say premium prices will rise close to 20 pesos per litre by the end of the year.
Increases in fuel, flights and train fares come into force and could lead to other raises

Labour Day was not just marked by a holiday, but also a flood of key price hikes, as increases ranging from three to 100 percent in fuel, charter flights and train tickets came into force yesterday, which could lead to an acceleration of prices at a time when the government has been eager to maintain the deceleration that had been observed at the end of the first quarter.

Fuel prices have increased for the fifth time this year, this time by an average of 3.8 percent. They had been raised 5.4 percent in April, 6.1 percent in March, six percent in February and seven percent in January, with the latter month marked by a near-20 percent devaluation.

For their part, airlines were authorized to raise domestic flight prices by 12 percent.
Although marked by scarce payment controls despite significantly low rates, the General San Martín line, which connects Buenos Aires City with the provincial suburb of Pilar some 40 kilometres north-west, suffered a rate hike of 100 percent — from one to two pesos. Pensioners and the unemployed, among other groups, however, will benefit from discount fares.

In the first quarter of the year, the INDEC national statistics bureau posted an accumulated inflation of 9.7 percent, but a marked slowdown was noticed when comparing January’s 3.7 percent to March’s 2.6 percent.

Furthermore, the local subsidiary of tobacco giant Philip Morris, Massalin Particulares, announced price increases of between 21 and 32 percent.
The company’s competition, Nobleza Piccardo, is expected to follow suit over the next few days.

The standard pack of Marlboro will cost 25 percent more, or 15 pesos, while 20 Philip Morris cigarettes will set consumers back 21.7 percent more, or 14 pesos.

With the government-sponsored Price Watch scheme reaching supermarkets, suppliers, and the metallurgic and pharmaceutical industries, among others, many pundits considered that the Juan Carlos Fábrega-led Central Bank’s (BCRA) monetary absorption policy would mean progressively lower inflation in coming months.

In fact, on April 8, Economy Minister Axel Kicillof announced the incorporation of 108 products onto supermarkets’ price agreement list, for which prices are reviewed quarterly.

But with the consumption of public services rising 4.8 percent in March, according to INDEC, inflationary pressure is likely to come in higher when the bureau’s monthly Consumer Price Index for May is posted on June 13.

The General San Martín line is an exception, with the service registering 28.4 percent less passengers in March compared to the same month of 2013.

Fuel

Following yesterday’s hike, YPF’s premium petrol now costs 12.39 pesos per litre, while the “super” variety is priced at 11.01 pesos.

Other companies, which usually offer rates slightly higher than YPF, including Axion (formerly Esso), Shell, Petrobras and Oil, will offer similar rates.

The reference price for diesel was set at 9.98 pesos and 11.54 pesos for the premium variety.

In January, Economy Minister Axel Kicillof announced that companies’ post-devaluation hikes had been capped at six percent, commanding Shell to roll back its prices, an order that the company agreed to, although it was eventually allowed to increase power regardless

The government and oil companies nonetheless agreed to gradually increase prices throughout the year, with the fifth installment arriving yesterday.

Petrol stations’ chamber head Luis Malchiodi forecast “premium prices will rise close to 20 pesos (per litre) by the end of the year,” adding that “in parts of Argentina, it is already selling at 14 or 15 pesos.”

Trains

On the General San Martín railway line, passengers who hold a SUBE electronic payment card will pay two pesos for journeys of up to 0 and 12 kilometres, three pesos for trips between 13 and 36 kilometres long and four pesos to travel more than 37 kilometres.

Pensioners, household workers, Malvinas War veterans, recipients of the Universal Child Benefit scheme (AUH), among other groups, will receive a 40 percent discount on all rates.

Prices for school and university students will remain at 50 cents, while those without a SUBE card will pay a flat six pesos for all journeys.

The Sarmiento railway’s fares were also adjusted for the line that connects Once, Buenos Aires City, with Bragado, 210 kilometres away in the province.

First class tickets will now cost 85 pesos, while tourist class rates rose to 65 pesos.

Flights

The 12 percent hike granted for airlines sets two reference prices and two types of maximum tariffs, with which companies will have to set their own prices for domestic charter flights departing from Buenos Aires and Córdoba.

The minimum price allowed for a flight from the Buenos Aires City Metropolitan Airport to Bahía Blanca rose from 496 to 558 pesos, while the suggested price went up to 1,187 from 1,042 pesos and the maximum allowed to 1,485 from 1,326 pesos.

Likewise, the floor for a flight from Buenos Aires City to the Patagonia ski-resort of Bariloche rose from 963 to 1,079 pesos, the suggested rate from 2,022 to 2,285 and the maximum from 2,577 to 2,886 pesos.

For destinations not specifically mentioned in the resolution published in the Official Gazette the government indicated that price increases must be calculated according to flights of similar distance.

Herald staff with DyN, Télam

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