Buenos Aires — Argentina's Energy Secretariat has authorized increases in biodiesel and corn-derived ethanol for mixing into diesel and gasoline in November, but cut those for sugarcane-based ethanol, according to data released Friday.
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Register NowThe price of biodiesel, which is made from soy oil in Argentina, was raised 2.1% to Peso 28,112/mt ($782.30/mt) in November from Peso 27,529/mt in October, according to an update to the pricing on its website.
For sugarcane-derived ethanol, the price was cut 3.3% to Peso 21.274/liter from Peso 21.999/liter in October, while the price of corn-based ethanol was increased 8.3% to Peso 19.846/liter from Peso 18.318/liter over the same period, the data showed.
The department did not give reasons for the changes, which it makes monthly to reflect fluctuations in the cost of producing the fuel additives. Refiners buy all of their biodiesel and ethanol supplies from local producers to meet a 10% blend in diesel and 12% in gasoline.
Biofuel industry groups had been demanding higher prices, warning that a souring economy, fast inflation, 60%-plus borrowing rates and a more than 100% depreciation of the peso against the dollar this year are pushing up costs and damping profits.
The economy is poised to contract 2.5% this year and inflation is expected to surpass 44%, according to economists surveyed by the central bank.
For oil refiners, the higher cost of the biofuel additives is putting pressure on them to increase pump prices, yet with little margin to maneuver. The sour economy is depressing demand. Diesel sales plunged 10% in September on the year, and gasoline fell by 7.9%, according to the latest data from the Energy Secretariat.
The biggest refiner is state-run YPF, with a 55% share of diesel and gasoline sales, trailed by Shell-backed Raizen, BP-backed Pan American Energy and Trafigura. -- Charles Newbery, newsdesk@spglobal.com
-- Edited by Annie Siebert, newsdesk@spglobal.com