Shell defies in court Argentine government ban on fuel increases
Royal Dutch Shell which refines about 15% of Argentina’s fuel is waging a court battle against a government ban that prevents fuel producers from increasing prices. Shell’s federal court complaint was filed last week following a government order on August 18 mandating oil companies to lower fuel prices to a pre-August 1 level.
Gasoline prices in Argentina rose about 21% in the first half of 2010, according to data compiled by Montamat & Asociados, a Buenos Aires-based energy research company.
“Over the past year fuel prices have had continuous increases, which have had a negative impact on different sectors of the economy,” the government resolution said. Controlling fuel prices is a “key component in the government’s objective to ensure economic growth.”
Shell and the Argentine government have battled over fuel prices in the last few years. In 2005, then-President Nestor Kirchner asked consumers to boycott Shell for raising prices. In 2007, the government closed a Shell refinery because of alleged environmental concerns. A year later, the government banned Shell from exporting refined fuel. The ban lasted about a month, until Shell reduced its fuel prices.
Shell, Europe’s largest oil company, is one of Argentina’s four biggest gasoline station operators. The others are Spain’s Repsol YPF SA, Exxon Mobil Corp., the world’s largest oil company, and Oil Combustibles SA, which bought Petrobras gasoline stations earlier this year.
Shell owns a refinery in Argentina with the capacity to process about 113,000 barrels a day of diesel and naphtha fuels. Shell confirmed the federal court filing by e-mail.