A surprising increase in gasoline and diesel prices following a national government measure

The oil company YPF again modified its fuel prices this Wednesday, with an average increase ranging from 0.2% to 0.5%. The decision was made after thenational government decided to increase the prices of biofuels that are mandatory blended in the production of gasoline and diesel.

According to data from the NA agency, the increases were $2 per liter (0.22%) for premium gasoline, 0.19% for premium gasoline, 0.46% for regular diesel, and 0.40% for grade 3 diesel. Although the percentages are low, they mark a change in trend compared to the previous decline.

The adjustment took motorists by surprise, as just a few days earlier fuel prices had fallen by an average of 4%, reflecting a drop in international crude oil prices. Now, the increase is due to internal factors related to production costs.

The trigger for this increase was a resolution by the Ministry of Energy, which on Tuesday raised the price of bioethanol made from sugarcane—produced primarily in Tucumán, Salta, and Jujuy—and bioethanol derived from corn—produced in Córdoba—by 2%. It also raised the price of biodiesel by 5%, of which Santa Fe and Buenos Aires are the main producers.

With these changes, a liter of sugarcane bioethanol is now $788.18, corn bioethanol is now $722.39, and a ton of biodiesel is now $1,251,837. These updates have a direct impact on refineries, as legislation requires them to blend fixed percentages of biofuels with fossil fuels.

YPF explained that the goal is to "reflect supply conditions and production costs in the market," which depend not only on crude oil and the dollar, but also on biofuel prices and tax burdens.