Metrogas gets a shove from the Argentine government
Faced with an ever-worsening energy crisis and presidential elections in October, the Argentine government decided that the best thing it could do was to intervene (June 6) briefly Metrogas, the country’s largest gas distributor.
The unprecedented action by the government left markets surprised. At day’s end Metrogas’ head Roberto Brandt was forced to resign paving the way for Vito Camporreale to become president. Camporreale was forerly vice president of the distributor that serves 2.5 million clients in the city of Buenos Aires and part of Greater Buenos Aires.
The government justified the intervention on the grounds that Metrogas was scaling back gas supplies to industrial clients that have uninterruptible contracts.
Even so, one must ask what is worse: a distributor that cannot supply gas to industrial clients because there isn’t enough gas or the intervention by the government, which forced the company to give the boot to its president?
I believe the latter was by far more serious. If Argentina has burned many bridges with foreign investors in previous years, this most recent action reinforces the notion that one should think many times before investing in this country.