The Government postponed the increase in taxes on liquid fuel (ICL) and carbon dioxide (IDC) that affects the price of a liter of gasoline and diesel until March. The Executive was scheduled to unfreeze this tax burden this Thursday. Both taxes have been frozen since July 2021. Meanwhile, the oil companies, for their part, are analyzing the price path they will apply in the coming months.
Through decree 107, published this Thursday in the Official Gazette, a new schedule was established to increase the taxes set for virgin fuels. In this way, the first increase will occur on March 1 corresponding to the first two quarters of 2023. Meanwhile, the other updates are planned for April 1 and May 1.
A report from the Argentine Institute of Fiscal Analysis (IARAF) indicated that the value of the tax was set at $27.6 since October 2022 and today is equivalent to $227, 722% more. The last extension of the suspension was applied in November by the then head of the Treasury Palace, Sergio Massa, and would have meant an extra increase of $70 per liter or 25% directly to the public.
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Until now, a liter of super gasoline at YPF in CABA sells for $699 per liter, while premium gasoline reaches $862 per liter. Since the end of December and beginning of January 2024, fuel prices have accumulated an average increase of 90%.
What happened in the last three years with the fuel tax
The Government made the decision to suspend the application of the tax from the first quarter of 2021 to avoid a systematic increase in fuel prices in an inflationary context.
However, this determination was extended in time and the last official provision in this regard – which was published in November 2023 – established that the freeze would remain in force until February 1, 2024.
The fuel tax was created by Law 23,966, passed in 1998, with the objective of financing housing and infrastructure funds throughout the country. The tax imposes fixed amounts that are updated based on the inflation index every three months.
The Government made the decision to suspend the application of the tax from the first quarter of 2021 to avoid a systematic increase in fuel prices in an inflationary context. (Photo: Adobe Stock).
“The freeze in fuel taxes is a measure that implies that the State resigns the collection of these taxes to achieve better competitiveness in prices and avoid higher costs for citizens,” the Executive justified in that last decision that was published in the Official Gazette.
In this way, the Government can “not renew” this freeze, which will result in an increase in gasoline prices, since the tax component is usually automatically transferred to the prices.
News that is being updated-