Argentina's state will compensate gas distribution companies for "losses" they claim to have as a result of the local currency devaluation.
Less than a month before leaving his office, Argentina's President Mauricio Macri on Thursday authorized the disbursement of US$411 million in favor of oil companies, arguing that such a transfer is a "compensation" for the devaluation process which took place between April 2018 and March 2019.
"The government acted as if it were an employee of the oil companies and benefited them to the detriment of the population," a former official of the Energy Ministry Andres Repar commented.
Among the companies benefiting from this policy are YPF, Total Austral, Pampa Energy, Pluspetrol, Tecpetrol, Panamerican Energy, Wintershall, General Fuel Company, and Vista. The big entrepreneurs, however, are not satisfied by the right-wing government's decision.
Energy companies affirm that the amount to be granted, which was calculated by taking into account the Central Bank's passive interest rate, damages them because "it did not consider the evolution of foreign exchange rate and inflation levels," local outlet Pagina12 reported.
REGALO DE DESPEDIDA. A pocos días de dejar el poder, Macri autorizó q les paguen $24.524 millones a las empresas petroleras para “compensarlas” x la devaluación de 2018. La “deuda” surge de la decisión del gobierno de Cambiemos de dolarizar los precios de los combustibles pic.twitter.com/uAUVRYk2J0— nestorborro (@PichiCooke) November 15, 2019
"Farewell gift: a few days after leaving power, Macri authorized to pay $24,524 million pesos to the oil companies to 'compensate' them for the 2018 monetary devaluation. The 'debt' arises from his administration's decision to dollarize fuel prices."
On Nov. 2018, natural gas extraction companies and distribution companies announced that gas prices would be adjusted according to the price of the Argentine peso in dollars.
As a consequence of macroeconomic unbalances triggered by Macri's neoliberal policies, however, the Argentine peso underwent a noticeable devaluation, which pushed companies to index gas consumer prices to the U.S. dollar exchange rate.
Then Macri gave green light to what was called a "rate recomposition process." As a result of this "normalization", domestic gas prices increased by more than 1,000 percent between 2016 and 2018.