The Canadian Press - ONLINE EDITION
Posted: 02/3/2014 11:00 AM | Comments: 0
Last Modified: 02/3/2014 1:03 PM
BUENOS AIRES, Argentina - Argentina's government on Monday accused Royal Dutch Shell of a conspiring attitude that goes against the country's interests after the oil company hiked fuel prices by 12 per cent.
President Cristina Fernandez's government has issued several price control programs to try to tame inflation, which private economists estimate at around 30 per cent. Rising consumer prices remain among Argentines' biggest worries.
Cabinet Chief Jorge Capitanich said Monday there's no "technical reasoning" behind the Anglo-Dutch company's price increase and said the oil giant is moved by "greed."
Shell said in a statement that the measure was taken because of "the evolution of variables affecting Argentina's fuel market" as well as a strong rise in the cost of crude in the local currency.
Shell Argentina President Juan Jose Aranguren, told local Radio Mitre that the cabinet chief is committing an "abuse" by using "such strong words against an oil company's duty to try to defend its interests inside the ongoing economy."
Aranguren also asked if there's any "greed" in raising fuel prices by 12 per cent after the "supplier hiked the cost of the inputs by 23 per cent."
Argentina suffers from a shortage of dollars, one of the world's highest inflation rates and an inability to tap into global credit markets after it defaulted on a debt of more than $100 billion during its 2001-2002 economic collapse.
The growing economic woes have led the centre-left government to take a more confrontational position against banks and economic analysts, whom they often say are trying to cause instability. Cabinet members have even said that a recent hard drop in the peso that shook global financial markets was fed by speculators including Shell.
The company has denied wrongdoing. It's not the first time that Argentina's government taken aim at Shell. In 2005, Fernandez's late husband and predecessor, President Nestor Kirchner, called on Argentines to boycott Shell after it raised local prices amid rising oil costs. Shell quickly pushed pump prices back down after government-aligned protest groups marched on its stations and sales slumped.
Gas prices at pumps in Buenos Aires ranged from 10.46 pesos ($1.30) to 11.86 ($1.47) per litre. Diesel was selling at 9.32 pesos ($1.16) per litre.
"As a worker, this affects us: 12 per cent more comes out to like 40 to 50 pesos ($5 to $6) more every day," said Julio Gimenez, a Buenos Aires taxi driver.
"Multiply that by 20 something days a month and it makes a big difference. I don't know if it's part of a conspiracy. Only (Shell) knows its costs."
Private analysts estimate that Argentina's economy will expand by no more than 1.5 per cent, mainly because of lower commodity prices and waning demand from China for its soybeans and other agricultural commodities.
The government's policy of nationalizing private firms, including the expropriation last year of the Spanish energy company Repsol's YPF unit, has also scared away investors.
Cristian Kovadloff in Buenos Aires contributed to this report.
Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.
Having problems with the form?Contact Us Directly
South Korea pact cheers livestock sector
FBI hunting Hawaii for top domestic terror suspect
India's consul general wants to ratchet up trade
NFL teams, developer reach pact on NJ megamall
We build; will they come?
Swiss ex-banker pleads to helping US tax evaders
Spring hiring outlook upbeat
Herbalife facing FTC inquiry
Westco to build three new chicken barns in province
Microsoft appoints ValueAct president to board
Russia news site chief fired over Ukraine coverage
NY comptroller: Average Wall St. bonus over $164K
Judge orders ex-trader 'Fabulous Fab' to pay $825K
North West sees Q4 jump in sales
Canadian company aims for $20 tablet