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Argentina creates diesel import incentives to fight shortage

·1 min read

BUENOS AIRES, June 16 (Reuters) - Argentina's government announced new economic incentives on Thursday for refining companies in an attempt to boost diesel imports and ease a weeks-long shortage of the motor fuel that is crucial to the agricultural sector.

With Argentina experiencing rising inflation, the government stressed that the incentives aim to address insufficient refining capacity at a time of growing demand from industrial users, according to a published decree.

The incentives, which go into effect on Thursday, allow participating refiners to request a tax credit applied to the total liquid fuel and carbon dioxide taxes they pay on their diesel imports. Some smaller refiners will be eligible to request an additional credit, according to the decree.

On Wednesday, the government announced an increase to required biodiesel content in diesel blends, another attempt to combat the shortage.

The government argues that developing countries are particularly vulnerable to higher fuel prices, especially those dependent on foreign supplies.

Domestic demand for diesel jumped 14% year-over-year in the first quarter, according to government data. (Reporting by Lucila Sigal; Writing by Kylie Madry; Editing by David Alire Garcia and Grant McCool)