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SOUTH AMERICAN ENERGY DAILY ROUNDUP (March 24, 2009): Argentine consumer group sees 60%-400% gas tariff hikes

March 24, 2009

South America Energy Markets (SAEM) will begin a daily roundup of the top-five stories affecting energy markets in the region with links. The roundup includes all the major web dailies of South America and other websites that write about the region’s energy markets. I aim to publish SAEM Daily Roundup from Monday through Friday by noon London time.

March 24, 2009


Owing to an ever-growing difficulty of the government to subsidize energy and finance infrastructure projects, consumer group Centro de Educacion al Consumidor believes that the government will give the nod gas tariff hikes of between 60% and 400%,  reports Buenos Aires business daily Ambito Financiero. The government gave the green light last year to gas distributors and the country’s two transporters, TGN and TGS, to raise tariffs on average from September 1  by 10%-20%. The tariff hikes did not apply to 3.380 million low-income households, which account for 23% of total consumption. While it is not certain by how much the government will approve new tariff hikes, one matter is for certain: they will little choice owing to the deterioration of the country’s trade balance.


Opposition Partido Nacionalista, which is led by Ollanta Humala, accused the government of former President Alejandro Toledo of favoring LNG exports to Mexico at the cost of the domestic market. Humala, who lost to Alan Garcia in the 2006 presidential elections in a close 53%-47% vote, said that the lack of sufficient gas to satisfy local consumption has forced industries to lower or halt output as well as the government to raise tariffs from May 1. If there is a matter that can heat up Peru’s political sector, it is gas. Shell and Mobile abandoned the Camisea project in 1998 after differences with the government over how much  gas from Peru’s biggest field should be earmarked for exports.


After statements directed at Bolivia, in which Brazil does not have to depend on anyone’s good will for gas supplies (see South American Daily Roundup, March 20 & 23, 2009), Petrobras says that his country will begin to  import in the following months over 24 million cu m/day from Bolivia, the minimum allowed in the 1999-2019 gas-purchase agreement. No matter how much Brazil states that it does not need Bolivian gas in the future, such supplies will continue to play an important role. Petrobras imports about 99% of all gas imports to Brazil.


State-owned energy company Petroecuador announced the discovery of  reserves of 9 million barrels of oil in Drago Norte 1, located in the northeastern province of Sucumbios. The company said that initial tests show an API gravity of between 26 and 29 degrees. Petroecuador is hopeful of proving up reserves in the Shushufindi field as new wells are drilled. Ecuador is OPEC’s smallest producer with 506,000 barrels/day. About 47% of oil output in Ecuador is carried out by private energy companies.


Today and yesterday mark two important historic dates for South Americans: On March 24, 1976, Argentina suffered a military coup spearheaded by General Jorge Rafael Videla, who ushered in the bloodiest regimes in Argentina’s history. Despite the over 30,000 victims that disappeared during 1976-83, Argentina is still haunted by that era, which also led to the Falklands/Malvinas war against the United Kingdom. Bolivians celetrated on Monday the 130th anniversary of the beginning of hostilities with Chile. The War of the Pacific (1879-84) forced Bolivia to become landlocked. Bolivia, which has lost all of its wars against its neighbors, still claims an outlet to the Pacific Ocean.

Below is a short videoclip in Spanish of the military coup of March 24, 1976.

These briefs can be reprinted as long as as the source is cited.

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