Argentina raises fuel prices

BUENOS AIRES, June 2 (Xinhua) -- Gasoline and gas oil prices in Argentina rose on Saturday by 5 percent and 4.5 percent, respectively, in keeping with a decision by the Energy and Mining Ministry.

The hike is the first of two planned price increases the government negotiated with crude producers and refineries, as well as gasoline stations and other fuel suppliers.

The second price increase of 3 percent is to take effect in July.

The move aims "to cushion the impact of fuel price hikes due to the rising costs of the industry, particularly the international benchmark price of Brent crude, the (dollar-peso) exchange rate, and the cost of biofuels," according to the ministry.

The measure includes a 6.7-percent tax on liquid fuels and carbon dioxide fuels, which was announced by the government on Friday.

Energy Minister Juan Jose Aranguren said he was not ruling out further price hikes after July, but the government said it was negotiating with oil companies, including Argentine energy company YPF, Shell C.A.P.S.A and Pan American Energy LLC, to reach a deal on stabilizing prices.

Analysts expect the price hikes to push up inflation, projected to reach 25 percent this year, above the target of 15 percent initially set by the government. Enditem