April 7 (Bloomberg) -- The Royal Dutch Shell Group, Europe's second-largest oil company, scrapped a price increase at more than 900 gas stations in Argentina after President Nestor Kirchner's call for a boycott on the company drove down sales as much as 60 percent.

Shell said in a statement it lowered gasoline prices by 3.4 percent to 3.9 percent, reversing a price increase of between 2.6 and 4.2 percent last month that sought to offset the surge in international oil costs.

``The price increases didn't justify the drop in sales we saw; the government boycott had an impact,'' said Carlos Garcia, a spokesman for Shell in Buenos Aires.

Sales at some of the company's stations sank as much as 60 percent in the first few days after Kirchner, who called Shell one of the ``worst'' companies in the world, urged Argentines to boycott Shell on March 10, Garcia said. Garcia said sales are now down about 30 percent to 35 percent across Shell's network of 967 gas stations in Argentina. About 800 of Shell's stations in the country are run by franchisees.

Kirchner, 55, called the boycott as part of an effort to slow a surge in inflation in South America's second-biggest economy. Inflation quickened to 9.1 percent in the 12 months through March, the fastest annual pace since June 2003, as a two- year-old economic expansion fuels a jump in consumer demand.

To contact the reporter on this story: Daniel Helft at dhelft@bloomberg.net

Last Updated: April 7, 2005 10:53 EDT