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BUENOS AIRES, Argentina – The sudden shortage of fuel in Argentina during the past several days has led to accusations between the oil companies and President Cristina Fernández de Kirchner’s administration.
Through Julio de Vido, the federal planning minister, the government criticized Shell and Petrobras for the fuel shortage, accusing them of leading a “media campaign” to create “uncertainty” with consumers.
“There was a decision made by these companies to refine less petrol in order to create a shortage situation and force a price increase,” de Vido said in a statement released through the news agency Télam.
Gustavo Petracchi, Argentina’s former secretary of energy, however, said the fuel crisis centers on the government.
“In Argentina, investors are persecuted if they are not friends of the government,” he commented. “The heart of the problem is that there has not been an expansion of the refineries’ capacity in years. In a climate of growing demand and controlled prices, this eventually evolves into situations such as what we are currently experiencing.”
Francisco Mezzadri, president of the consulting firm Mezzadri & Associates, agrees with Petracchi, feeling it is inappropriate for the government to withhold crude oil exports because it hurts foreign investment.
“Since 2004, the government of Argentina has imposed caps on the price of fuel, which resulted in large scale retraction of investments by international companies,” said Mezzadri.
But the problem, he explains, doesn’t end there. YPF, which has a commanding 57% of the country’s fuel market, has tightened its hold on the sector by lowering prices to undercut the competition.
Mezzadri, however, said the pricing led to an even bigger problem. The increased demand surpassed supply, causing the company to become the country’s first to import gas in 30 years.
“The incentives that exist in other countries to explore for oil don’t exist in Argentina,” Mezzadri said. “International companies don’t want to invest in countries that take control of them. And with this government, there is very little predictability.”
The lack of fuel has caused motorists to endure long lines and rationing at gas stations.
“I have [waited] half an hour to fill up with fuel and on top of that, now I find out that there is fuel rationing,” said Pedro Stella, owner of a lighting company. “This is very bad for a country that needs to grow, like ours.”
YPF claims the fuel shortage is temporary. The Luján de Cuyo and La Plata refineries will not be able to store gas because they need to be repaired, leading to the company’s decision to import 50,000 cubic meters of fuel, representing about 20% of YPF’s monthly production.
“It appears that YPF’s importation of fuel is a structural problem,” Mezzadri said. “But it’s a complex issue. I think the tendency is that, to the extent prices don’t reflect actual costs and market value, it will create problems in Argentina relative to the propensity of companies to invest in production and development.”