MercoPress. South Atlantic News Agency

Fuel smuggling from Argentina

Magallanes energy distributors are warning local authorities of an incipient but growing contraband of fuel from neighbouring Argentine Patagonia where gasoline costs half the price.

Gasoline in Punta Arenas and Puerto Natales costs 583 Chilean pesos a litres but a few miles across the border in Argentina the same fuel sells for the equivalent of 280 Chilean pesos.

Local distributors warn that not only will the industry suffer but also government revenue since the price of gasoline sold in Chile includes 42% tax (VAT and a specific fuel levy).

Actually fuel prices, as most public utilities rates, in Argentina have remained unchanged since December 2002 plus the fact that the Patagonian provinces of Chubut, Santa Cruz and Tierra del Fuego benefit from a special rebate that dates back from when President Nestor Kirchner was governor of Santa Cruz.

Cheaper fuel is one of the many incentives to attract people to live in Patagonia.

Magallanes fuel distributors point out that ironically the fuel sold in some of the Argentine neighbouring populations such as Río Turbio, where Puerto Natales residents are going to fill their gasoline tanks, is supplied from Cabo Negro, close to Punta Arenas and a dependency from Chile's government oil company, ENAP.