MercoPress. South Atlantic News Agency

Exploding demand causes gas shortage

The strong growth of the Argentine domestic natural gas market and “future disruptions” can only be solved with a firm government action, claimed in Buenos Aires Repsol-YPF Foreign Relations Manager Fabian Falco.

"In January and February we supplied the domestic market an additional 34% over the same months in 2003, but we're facing an exploding demand and if the government doesn't act quickly we'll be in trouble", said Mr. Falco.

The "irrational" demand faced by Repsol-YPF and other suppliers has skyrocketed 70% in homes and 11% in industry.

Mr. Falco revealed that the government and suppliers are holding talks but also pointed out that some exporters who were significantly benefited with the "pesification" of natural gas rates (strong devaluation of the Argentine currency and freezing of public utility rates) are refusing to pay a fairer price for the fuel they consume.

"We agree with the government that a system of gradual price recovery for residential consumers is necessary, but we insist that industry particularly those linked to the export market can pay far more", underlined Mr. Falco.

The Repsol-YPF official recalled that during 2003 the company invested 250 million US dollars in increasing overall delivery to the domestic market and "we have a further 50 million in storage facilities but this must be a joint effort with the other 28 natural gas suppliers of Argentina".

The President Kirchner administration is currently reviewing the privatization contracts of most public utilities companies arguing that since 1996 they have invested well below what were established in the original contracts. The Argentine government has repeatedly stated that there will be no public utilities rates increases until the companies can prove investments.