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article imageShell hikes gas prices 12% in Argentina

By AFP     Feb 3, 2014 in Business

Shell raised fuel prices in Argentina by 12 percent Monday, drawing fire from the government of President Cristina Kirchner as it struggles with inflationary pressures.

The jump was Shell's second price increase this year, following a seven-percent hike in early January.

Jorge Capitanich, Kirchner's chief of staff, accused the Anglo-Dutch oil giant of acting "contrary to Argentina's interests."

"It's a unilateral decision to do harm," he said.

The latest bump takes the price at the pump to 11.87 pesos ($1.47) a liter for premium gasoline, compared to 9.99 pesos charged by state-owned YPF, the country's largest distributor.

Shell said the increase reflected the sharp rise in the cost of imported oil.

Shell Argentina president Juan Jose Aranguren told Radio Mitre that the government's accusations of a conspiracy were "abusive."

The peso has lost 18 percent of its value this year, including a 14 percent plunge when the Central Bank stopped supporting it for two days last month.

The peso's drop comes amid a sharp rise in inflation, which private economists put at about 30 percent but the government says is about 10 percent.

The government, which has blamed the peso's fall on "speculative attacks" and "market coups," has been trying to roll back prices to their pre-devaluation levels.

But prices in supermarkets and other sectors have shot up over the past ten days, easily surpassing the fluctuations in the value of the dollar.

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