By Maximilian Heath
BUENOS AIRES (Reuters) – Argentina’s economy minister Sergio Massa, a candidate for president in the country’s election run-off later this month, pushed back planned fuel tax hikes on Wednesday in a bid to keep pump prices down after a recent shortage.
The move will defer already delayed tax adjustments, intended in part to keep up with high inflation, until Feb. 1. The increase in the fixed amount levied on petrol and diesel had been intended to take effect today.
“We are going to defend the pockets of the Argentines,” Massa said in a statement, adding the move would help keep pump prices down at the expense of state tax takings.
The extended tax freeze comes as the South American country emerges from a fuel crisis in recent days, where many gas stations have run out of supply due to local refinery stoppages and a lack of foreign currency reserves holding up imports.
It may give Massa, who used targeted tax cuts to outperform polls in the October first-round ballot, a boost with voters ahead of the Nov. 19 head-to-head against radical libertarian Javier Milei, who supports sharp cuts in state spending.
Massa on Wednesday said the recent fuel crisis had been resolved, and defended government measures that kept local fuel prices below international levels. He dismissed what he said were calls to hike prices sharply, though did say he wanted to ensure incentives for the development of the sector.
“We have to discuss face-to-face what are the margins that guarantee maintaining investment levels of the hydrocarbon sector, but also look after the pockets of Argentines,” he said.
Argentina’s Vaca Muerta formation is the world’s fourth largest shale oil reserve and second largest for shale gas.
(Reporting by Maximilian Heath; Editing by Adam Jourdan and Jonathan Oatis)
