Argentina: Fuel price rises complicate March inflation and tighten the government’s peso strategy
In the market, several consultancies are already assuming that the latest fuel adjustment, together with education, tariffs and food, will make that path harder.
Rising fuel prices have added new pressure to Argentina’s March inflation outlook, in a month already burdened by the start of the school year, utility adjustments and seasonal pressure on food prices. In the local market, gasoline prices have risen by roughly 7% to 8% so far in March, increasing the risk that monthly inflation could move back toward the 3% range.
That challenge coincides with a key day for the Treasury. The government faces nearly ARS 10 trillion in maturities this Thursday and is expected to roll over most of them through fixed-rate, floating-rate and inflation-linked instruments, in line with its strategy of preventing those pesos from being released into the market. The logic is twofold: to preserve disinflation and to avoid excess liquidity feeding into the exchange rate or consumer prices.
The official caution is tied to the current monetary framework. Argentina’s central bank has defined a gradual “re-monetisation” process for 2026, with monetary base growth linked to stronger money demand and foreign exchange purchases, while still keeping stabilisation as its central objective. In that context, part of the pesos injected through FX intervention has been absorbed through Treasury placements and other sterilisation tools.
The tension is clear because the government is trying to slow inflation without losing the exchange-rate anchor. The wholesale peso closed on March 11 at ARS 1,396.45 per dollar, below the ARS 1,429 median projected for the March average in the BCRA’s latest REM survey, helping contain part of the inflationary inertia. But that relief now coexists with higher oil prices and their partial pass-through to local pumps.
The starting point is not especially low either. The central bank’s published indicators show monthly inflation at 2.9% and annual inflation at 32.4%, meaning any March acceleration would complicate the government’s political goal of pushing inflation firmly below the 3% threshold before winter. In the market, several consultancies are already assuming that the latest fuel adjustment, together with education, tariffs and food, will make that path harder.
That is why today’s debt auction carries more weight than usual. More than a routine operation, it will test the government’s ability to keep absorbing liquidity without overheating interest rates or damaging the recovery. With fuel pushing from below and the exchange rate still acting as the main anchor, the room for error is narrowing.
