BUENOS AIRES, Dec 8 (Reuters) - Argentine state oil company YPF (YPFD.BA) has increased fuel prices at the pump by an average of 25%, a company source told Reuters on Friday, as the country battles inflation that could reach over 180% this year.

The move comes ahead of the inauguration of President-elect Javier Milei over the weekend, and as other oil companies also pushed up prices at gas stations nationwide by around 20%, according to local TV news.

Milei, a far-right libertarian swept a second-round victory last month with 56% vote over ruling party Economy Minister Sergio Massa. On Sunday, he will inherit a country with soaring inflation, dwindling foreign reserves and rising poverty rates.

Milei has pledged economic shock therapy, which includes eventually shuttering the central bank, dollarizing the economy and slashing public spending.

"At some point it had to blow up. It's a shame but there's no other way and we're paying the consequences," Franco Hit, 43, said as he refilled his tank at a gas station in Buenos Aires.

"These things are inevitable. It is not because of the new president," he added. "It's going to be hard, very hard."

This week, Milei's incoming Energy Secretary Eduardo Rodriguez told the Surtidores news site that a "free fluctuation (in fuel prices)" was needed, "without indirect (government) control... through YPF."

The Argentine government holds 51% of YPF shares.

Last month, Milei selected senior energy executive Horacio Mari to lead YPF, one of Argentina's top domestic sellers of refined fuels. The firm also leads development of Vaca Muerta, a key supplier of natural gas and crude oil.

https://www.reuters.com/markets/commodities/argentine-oil-company-ypf-ups-fuel-prices-by-average-25-company-source-2023-12-08/