Argentina's Energy Secretariat said it has authorised a gradual 91% increase in biodiesel prices and 56% in the price for ethanol for oil refiners to mix into diesel and petroleum over the next few months.
This is the first hike since October.
The hikes are already raising pump prices, a key source of revenue for investment in the oil sector.
The price of biodiesel, which, in Argentina, is made from soy oil, jumped an initial 59.3% to Peso 77,300/mt (€738) in January from Peso 48,533/mt (€433) in October-December 2020, according to a report from S&P Global Platts.
The price of biodiesel will then rise to Peso 86,875/mt (€830) in February, Peso 89,975/mt (€860) in March, Peso 90,300/mt (€863) in April, and Peso 92,558/mt (€884) in May for a total hike of 90.7% from last October.
In a bid to limit the impact of the hikes on diesel pump prices, the resolution scales back the required 10% mix.
Refiners will only have to mix 5% in January, half of the previous requirement. The mix will increase to 6.75% in February and 8.4% in March before returning to 10% in April.
The price of ethanol made from sugarcane will rise 33% to Peso 43.6/litre (€0.41) in January from Peso 32.78/litre (€0.31) in October, according to the resolution.
The price will then rise to Peso 47.80/litre (€0.45) in February, Peso 48.70/litre (€0.46) in March, Peso 49.60/litre (€0.48) in April, and Peso 51.132/litre in May — up 56% from the October-to-December period a year ago.
Argentina is one of the world's biggest biodiesel producers, with 4.5 million mt/year of installed capacity, but production slumped in 2020 as a March-November lockdown for the coronavirus pandemic reduced domestic consumption of diesel and a global economic slowdown has cut exports.
Ethanol production has taken a hit from the lockdown.
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