MercoPress. South Atlantic News Agency

Argentine court blocks utility hikes

The Argentine judiciary issued an injunction Thursday blocking increases in gas and electricity rates imposed last month by presidential decree, court sources reported.

The injunction will apply nationwide and came in response to a motion filed by National Ombudsman Eduardo Mondino. An order handed down Monday had suspended the rate hikes only in the city of Buenos Aires.

Late last month, Argentine President Eduardo Duhalde authorized average increases of 9 percent and 7.2 percent, respectively, in the rates for electricity and gas.

He implemented the increases by executive order after the failure of public hearings where representatives of consumers, utility firms and the government were supposed to reach a consensus on rates.

Under Argentine law, any increase in rates must be approved through the public-hearing process.

The largely foreign-owned utility companies were demanding increases of between 20 percent and 40 percent, saying that they could not guarantee continued quality service under the existing rate structure. Rates have been frozen since January, when the government abandoned the decade-old policy of maintaining the peso at par with the dollar, and utility companies have seen their losses mount as the value of the Argentine currency has plunged by two-thirds against the greenback.

An association representing electricity producers warned Thursday that Argentina will face an energy crisis in the medium term if rates are not increased