Free oil market to reign in Argentina, says minister

Bloomberg

Argentina’s move to a free market for energy prices remains on track. A recent decision to cap crude oil prices and limit fuel price gains in order to stem inflation was an outlier, according to Javier Iguacel, the nation’s new energy minister. Restricting crude price increases only extinguishes competition and, in turn, the possibility of cutting costs, he said.
“There’ll be no more agreements,” Iguacel said in an interview. “It’s a free market. Comp- anies can set the fuel prices they consider best for business. And they shouldn’t expect a lower domestic oil barrel either.”
Investors had become jittery because of the agreement from May to July, which capped oil at $68 a barrel this month and constrained fuel price hikes in a bid to shield Argentines from a peso devaluation and a rally in crude. Inflation is running at more than 25 percent.
State-run YPF SA raised
fuel prices at the weekend for July by more than was originally agreed with Iguacel’s predecessor, ex-Royal Dutch Shell Plc executive Juan Jose Aranguren. That demonstrates the free market already reigns, he said.
In a sign Argentina is committed to deepening its market shift, Iguacel confirmed the government will eliminate the role of a state intermediary in future power contracts, starting in September.