The period of inflationary relief experienced by the energy sector in Latin America and the Caribbean (LAC) has come to an end. After reaching its lowest level of the period under analysis—close to zero—in February 2026, regional energy inflation began to accelerate steadily from March onward, driven by escalating geopolitical tensions in the Middle East and the Strait of Hormuz.
According to our report, the region’s year-on-year energy inflation jumped to 2.12% in March, increased to 4.52% in April, and climbed further to 6.41% in May 2026. The May figure is more than three times the level reported just two months earlier.
In contrast, the overall consumer price index (CPI) in LAC remained comparatively stable, posting moderate increases over recent months and closing at 4.13% in May. This divergence reflects the fact that the broader inflation index is better able to absorb external shocks through its diversified basket of goods and services, whereas the energy sector is directly exposed to global price disruptions.
Fuel Prices
Fuel Prices
The international price surge continues to put pressure on import, refining, transportation, and distribution costs across the region. As a result, retail fuel prices remain above the levels recorded before the Middle East conflict:
• Gasoline: The average price remains 16% above its reference level, demonstrating greater downward price rigidity.
• Diesel: Prices are still 13% higher than the reference level, despite a slight partial correction observed in recent weeks.
OLACDE notes that upward pressure on domestic fuel prices persists even as global crude oil markets begin to ease.
The transmission of this international shock to retail fuel prices has been neither immediate nor uniform, owing to factors such as inventories purchased at previous price levels, taxation schemes, fuel subsidies, and national price stabilization mechanisms.
Access the full report here:
https://www.olade.org/en/publicaciones/energy-inflation-report-no-26/
