BUENOS AIRES, Aug 18 (Reuters) – Argentina’s economy
ministry will freeze domestic crude oil prices at $56 per barrel
until the end of October after an agreement with the industry,
to help tamp down triple-digit inflation, two oil sector sources
said on Friday.
The agreement came after meetings on Thursday between
Economy Minister Sergio Massa and executives from oil companies
such as YPF and Vista. The government had
also announced a freeze on domestic fuel pump prices.
The price cap, amid wider domestic inflation at 113% and
rising, sets the local crude oil barrel price below the $63 it
had been before and well below the Brent crude benchmark
now at about $85. Argentina has long controlled the domestic oil
price.
The two sources told Reuters on Friday that the local
industry, which produces oil and gas largely from Argentina’s
huge Vaca Muerta shale formation in the country’s Patagonian
south, had agreed to a fixed price until Oct. 31.
“We understand the situation and we have reached an
understanding,” said an industry source, asking not to be named.
“It is a measure of extreme necessity and urgency.”
The South American nation has been battling against
sky-rocketing annual inflation which
topped 113.4%
through July, with monthly inflation set to rise higher in
August after a shock primary election result led to a sharp peso
devaluation.
Argentina’s energy secretariat did not immediately
respond to a request for comment on the crude price fix.
(Reporting by Eliana Raszewksi; Editing by Adam Jourdan and
Marguerita Choy)
