Argentina’s Massa delays fuel tax hike as election looms

To keep pump prices low following a recent shortfall, Argentina’s Economy Minister Sergio Massa, who is running for president in the nation’s election runoff later this month, postponed scheduled increases in gasoline taxes on Wednesday.

This will push back the already-postponed tax changes to February 1, in part to keep up with the rapid rate of inflation. It was anticipated that the set sum charged on gasoline and diesel would increase today.

In a statement, Massa said, “We are going to defend the pockets of the Argentines,” adding that the action will keep pump prices low at the expense of state tax collections.

The prolonged tax freeze coincides with the country’s recent recovery from a fuel crisis, in which several gas stations experienced a shortage of gasoline as a result of local refinery stoppages and a deficiency of foreign currency reserves impeding imports.

It may provide Massa, who defeated extreme libertarian Javier Milei, who favors drastic cutbacks in state expenditure, on November 19 in the run-off against Milei. Massa utilized targeted tax cuts to outperform surveys in the October first-round voting.

On Wednesday, Massa defended government actions that maintained domestic fuel costs below global averages and said that the current fuel crisis had been overcome. Although he denied that there had been requests for a significant price increase, he did state that he intended to provide incentives for the industry’s growth.

“We have to discuss face-to-face what the margins are that guarantee maintaining investment levels in the hydrocarbon sector, but we also have to look after the pockets of Argentines,” he stated.

The Vaca Muerta formation in Argentina is the second-largest shale gas reservoir and the fourth-largest shale oil reserve in the world.