Trucks loaded with food are queuing at gas stations in Argentina, waiting for diesel fuel. For two months, the lack of fuel has mainly affected the agricultural sector, which is the largest source of foreign exchange in the country. Now, the major concern is the risk of lack of wheat for domestic consumption and for export.
According to the Argentine Federation of Cargo Transport Business Entities (Fadeeac), between 25 of May and the last Sunday (5), 19 of the 19 Argentine districts had diesel supply problems. In addition, last week, 26% of truck drivers who use this fuel in Argentina came to expect more than 12 hours at the gas stations to be able to fill up and 35% waited between 6 and 12 hours in line.
“The panorama is every day more complicated. Agricultural and industrial production, which already suffers from delays, will be even more affected if the current situation is not reversed”, warns the president of Fadeeac, Roberto Guarnieri. “We cannot fulfill our commitments in a timely manner and jobs are lost due to the uncertainty generated by the lack of normal supply”, he adds.
The president of the Argentine Confederation of Medium Enterprises (Came), Alfredo González, points out that the lack of diesel “is putting regional economies in check.” González also called for an urgent solution from the authorities to prevent the crisis from further affecting high inflation in Argentina.
In some regions of the country, the problem is even greater due to the demand of drivers from neighboring countries who supply This is because YPF, a state-controlled private company that supplies 47% of service stations in Argentina, has adopted a policy of delaying the necessary price increases. , there is a difference in values in relation to the international price, which, in the last week, ranged from 35 to 160 %.
The country imports 1/3 of the diesel it consumes. Most refiners buy from outside the country only the minimum necessary to fulfill the contract. Stations without a flag need to import wholesale, which especially at this moment costs 30% more. At these gas stations, which represent 20% of the market, it becomes more expensive to fill up, so queues form around the cheaper establishments .
Pressed by businessmen and producers, the government of Argentina promised to increase diesel imports to normalize supply.
Lack of fuel can generate lack of food
“We cannot live in this critical situation that generates uncertainties and increases in production costs”, said the president of Sociedade Rural Argentina, Nicolás Pino, in an interview with the newspaper Clarín.
In addition, the Buenos Aires Grain Exchange predicts a reduction in the area planted with wheat, due to drought conditions, which increases the concerns of specialists and authorities.
Wheat, together with corn and soybeans, represents 47% of the country’s exports. Argentina is the 7th largest producer of wheat in the world, in addition to being the first in the export of flour. Even so, the price of bread continues to rise in Argentine bakeries.
Inflation in the country
The War in Ukraine reinforced a problem that Argentina has suffered for ten years. Argentines live with high inflation, which reached 50% in 2021. With the conflict in Eastern Europe, the jump was 20% in the first three months of 2022, according to official data.
The solution proposed by Argentine President Alberto Fernández was sent to Parliament this Monday (6th). It is the bill that should create taxation for the “unexpected income” obtained by large companies, as a way of offsetting sharp increases in international prices.
According to him, the new tax bill serves , also, to comply with the debt refinancing agreement of 45 billions of dollars with the International Monetary Fund (IMF).
The news, of course, was not well received by the Argentine business community. The president of the Argentine Business Association (AEA), Jaime Campos, spoke this Tuesday (7th) at the event to celebrate the 19 years of the entity, declaring that the new taxation is a setback. “We have more than 160 taxes in our country. And, in order to grow again and generate employment, it is necessary to reduce taxes”, he reinforced.
A video recorded by the Argentine president for the participants of the event was broadcast on a big screen. On the recording, Fernández commented on the new tax. “We are not able to relate our food producers to all Argentines, nor can we fully separate international prices from domestic values,” said the president, asking for the understanding of businessmen.
The Argentine leader also spoke about the hunger that will increase in the world, especially in poor countries, due to the war in Ukraine. And he explained that, although the conflict can generate an advantage for the export of food produced in Argentina, “it is an opportunity for everyone who inhabits the land of Argentina, and not just for a producer or entrepreneur”.