Argentinian Oil Producer YPF Increases Fuel Prices 7%

Argentina’s largest producer of oil and gas YFP has bumped diesel and gasoline prices by 7 percent in hopes to finance a $2.7 billion US investment to boost crude production.

YFP told consumers that the increase would take effect at the start of the day on March 18 and would be the first of three increases for the rest of 2021, with a total planned increase of 18%.  

YFP relies on the revenues from product sales to finance investments, largely due to the country’s poor credit rating. Outside investors are unlikely to take a risk, and there isn’t enough money in local Argentina-based financial institutions to finance future plans.

The proposed investment plan would be a steep 70 percent higher than 2020’s plans, and intends to boost production growth in the oil sector, which saw a 9 percent slump amidst pandemic restrictions. COVID-19 regulations forced YFP to close multiple wells, being unable to move enough product to make it worth the cost.

Production rates stopped falling in the second half of 2020, with YFP saying that they expect numbers to grow by 5 percent in 2021. The money made from these price hikes will be spent largely to assist in their production to the US, accounting for $1.5 billion.

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