Chile lowers petrol pump prices in wake of high inflation

miércoles 19 de noviembre de 2014 09:30 GYT
 

SANTIAGO Nov 19 (Reuters) - Chile said on Wednesday that it would lower the price band at which petrol is sold to gas stations, reflecting a fall in the oil price and government worries about persistently high inflation.

Chile imports nearly all the fuel it consumes, most of which is purchased and sold on to retailers by state-run firm ENAP .

Earlier this year, the government introduced a mechanism to cap fuel price volatility.

However, since then, global oil prices have dropped by around a third.

"The government has decided to modify the parameters of the mechanism's price band...to speed the passing on of international prices to local consumers," Finance Minister Alberto Arenas told reporters.

On average, fuel prices will fall by 62 Chilean pesos (around 10 U.S. cents) a liter from Thursday.

High petrol prices and a weakening peso have contributed to surging inflation in Chile in recent months. It now stands at 5.7 percent, well above the central bank's tolerance range.

The measure announced Wednesday could cool inflation by around one percentage point in November, "and some percentage points more in the year," said Arenas.

(Reporting by Felipe Iturrieta, Writing by Rosalba O'Brien; Editing by Alden Bentley)