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News > Latin America

Union to Macri: Give Us a Raise If You Want Backpay for Gas

  • Argentina's President Mauricio Macri talks to businessmen at Casa Rosada Presidential Palace, during the G20 conference in Buenos Aires, Argentina Oct. 4, 2018

    Argentina's President Mauricio Macri talks to businessmen at Casa Rosada Presidential Palace, during the G20 conference in Buenos Aires, Argentina Oct. 4, 2018 | Photo: Reuters

Published 10 October 2018

Argentine President Macri is getting lots of pushback from Congress and unions for insisting that consumers retroactively pay for gas after the peso devalued.

The Argentine government is getting a lot of pushback on its resolution to retroactively charge the public for natural gas after the peso devalued by more than half by September.

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Opposition parties, including Cristina Fernandez’ Front For Victory, are calling a special lower house session on Oct. 18 to debate Resolution 20/18 of the Secretariat of Energy announced by Energy Secretary Javier Iguacel earlier this week.

The measure would force the public to pay a higher tariff on natural gas as backpay for what they consumed in their homes between April and September of this year. Heating fuel prices were set in March for those months when the peso was about 20 to its pegged U.S. dollar. In late April the Argentine peso downspiraled, reaching around 43 to the dollar in late August and currently sitting at around 38.

Experts say the fast devaluation of the peso was largely due to the government’s inept economic policies.     

An opposition bloc, which has a majority coalition and is led by Agustin Rossi and Fernando Espinoza from Senator Fernandez’ Front For Victory party, is hoping to force right-wing President Mauricio Macri to withdraw the unpopular resolution that Iguacel approved on Tuesday.

House representative and president of the Consumer Defense Commission Marcela Passo, filed a complaint to prohibit the retroactive gas hike, which could continue in the house, according to local media.

Additionally, the provincial attorney general of San Luis is making a case against the extra gas fee to the federal justice system saying that for the public to pay retroactively for the energy is "illegal and unconstitutional."

The gas backpay comes at a time when over 25 percent of the adult population sits at or below the poverty line, food prices are increasing by four percent and inflation has risen by over 12 percentage points since May and is currently at 34 percent. Experts say the Argentine economy is headed for a recession in 2019. 

The San Luis Attorney General Eduardo Allende said Tuesday the case is not political but legal, arguing that users have already paid the increase in gas bills since April and that is why no retroactive fee is necessary.

"It is as if the owner of the pizzeria we went to last night told us that the price of mozzarella increased today, so we owe money on something we already paid," Allende told reporters.

The public official added that the government is already implementing a gas increase for January making it a 3,000 percent price increase for the home energy source since Macri took office in December 2015.

Regarding the government’s proposal, the Radical Civic Union party has proposed that the government pay for half of the supposedly US$264 million in gas back pay in the form of subsidies since 75 percent of those in the capital of Buenos Aires are saying the back fee is "expensive" or "unpayable," according to the Center of Metropolitan Studies (CEM).

Meanwhile, Wednesday morning Argentina’s Association of Pilots (APLA) is asking the state-owned Aerolineas Argentinas for a 24 installment raise, the same amount of time the government is giving public consumers to make up the difference in the devalued peso gas price.

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