MercoPress. South Atlantic News Agency

Chile's energy bill forecasted to increase 2.8 billion US dollars

With the international price of oil closing on 120 US dollars a barrel and the need for greater purchases of oil, diesel fuel and natural gas, Chile estimates the additional cost this year in 2.8 billion US dollars according to the government owned oil corporation ENAP, CEO Enrique Davila.

"All the experts keep insisting that a price in the range of 100 US dollars a barrel for the rest of the year should be rational reaction of the market. We are cautious, since oil prices in spite of the world's largest economy problems remain higher. I think no prices scenario can be discarded", said Enrique Davila. However Davila did point out that most of the current price can be explained by the market, supply and demand, "maybe 80%". But the rest is made up of "geopolitical and seasonal problems plus speculation" "It's hard to forecast how long the situation will continue but in ENAP we are considering several scenarios to ensure domestic consumption", he emphasized. Chile is highly dependent on Argentine natural gas for generating electricity and home cooking but since Argentina's policy is to privilege its own domestic market, Chile has for several years running been exposed to increasing winter shortages and the last two seasons, summer blackouts. And this year could be even worse since another source of energy: hydroelectricity is suffering the consequences of a severe drought in several regions with water reservoirs at record low and no immediate prospects of abundant rainfall.