Monday, March 30, 2020

ECONOMY | 08-05-2018 09:53

Prices: Reprieve for gas, 'subte' users as gov’t faces rising pressure

A City court has posponed a hike to 'subte' underground fares while Energy Minister Juan José Aranguren wants oil companies to implement a two-month price freeze.

Subte underground users and gas consumers were gifted some reprieve from rising prices this week, as the national government faces growing pressure over the rising cost of living.

A City court on Tuesday agreed to temporarily block an increase in the cost of a standard fare on Buenos Aires' underground transport system known as the subte. The standard fare was set to rise Tuesday from 7.50 pesos to 11 pesos (US$ 0.53c).

Responding to an injunction request lodged by City legislators Myriam Bregman and Patricio del Corro (Leftist Front), Judge Patricia López Vergara requested that City Hall provide its reasoning for allowing the subte operator SBASE to increase fares.

SBASE, which is owned by City Hall, has requested a 66-percent overall increase to fares. By June, a standard subte fare should cost 12.50 pesos.


Meanwhile, Energy Minister Juan José Aranguren wants oil companies to implement a two-month price freeze to slow the rise in consumer petrol prices.

International oil prices are at a five-year high with Argentine consumers particularly vulnerable given the recent spike in the value of the dollar against the peso.

Oil companies want to see a a six to 10-percent “recomposition” in prices, in line with changing local and international economic scenarios.

The government is hopeful that YPF, which is controlled by the Argentine State, will freeze prices for two months forcing its competitors to do the same.


Price hikes have been a political headache for the national government in recent weeks.

Opposition lawmakers will on Wednesday try again to stop the government's roll-back of subsidies on utility bills, while members of his own coaliton have also put pressure on the Mauricio Macri administration.

In an economic sense, the government is walking a fine line. Inflation in the first three months of 2018 accounts for 45 percent of the government's annual inflation target of 15 percent.


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