Buenos Aires — Argentina's Energy Secretariat said Thursday it has raised biodiesel prices by 6.6% for mixing into diesel, a move that hits refiners and retailers as a price freeze on diesel prevents them from passing on the price to consumers.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
The price of biodiesel, made mostly from soy oil in the country, was increased to Peso 33,618/mt ($8,274/mt), effective September 1, from Peso 31,549 in August, the department said in a resolution in the Official Bulletin, the newspaper of record.
Refiners are required to meet a 10% biodiesel blend in diesel products.
Biodiesel producers have been seeking higher prices as costs rise with inflation touching 55% and that is expected to rise further after a 25% depreciation of the peso against the dollar last month.
It is uncertain how the refiners will absorb the higher cost of biodiesel. The government froze crude, diesel and gasoline prices on August 15 until mid-November to try to contain inflation, which is expected to accelerate after the latest crash in the exchange rate. The freeze has cut the local price of crude to $49.50/b, or about 20% less than the $60/b for Brent, the international reference price followed in Argentina.
At the same time, refiners are struggling to pass on the higher cost of fuel additives to consumers as a recession now in its second year limits demand. While diesel sales rose 3.1% to 238,975 b/d in July year on year, according to data from the Energy Secretariat, it was a seasonal increase led by demand from farmers for planting and harvesting, industry insiders said.
The biggest refiner is state-run YPF, with a 55% share of diesel and gasoline sales, trailed by Shell-backed Raizen, BP-backed Pan American Energy and Trafigura.
-- Charles Newbery, email@example.com
-- Edited by Derek Sands, firstname.lastname@example.org
Biofuelscan covers the latest worldwide biofuel news and prices and provides a daily summary of market events. Use the request a free trial link and we will send you 5 issues free for your review.Free Trial