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Argentina begins natural gas and water subsidies reduction in three stages

Friday, March 28th 2014 - 08:29 UTC
Full article 28 comments

Argentina will cut expensive natural-gas and water subsidies this year which will have an increase impact in utilities' rates between 20% and 80% on average. The gas and water subsidies reduction will reach 80% of top consumers and the accumulative impact will range from the equivalent of 2.5 to 102 dollars, said the Ministry of Economy in a release. Read full article

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  • Leiard

    It's all smoke and mirrors.

    Mar 28th, 2014 - 11:24 am - Link - Report abuse 0
  • Anglotino

    Subsidies benefit the rich is commonly known. Seems Argentina finally woke up to the fact.

    They can't print more money and they have run out of places to raid it, so finally they are going to attempt to balance the budget a little more.

    Orthodox economic theory is finally permeating BsAs.

    Mar 28th, 2014 - 11:27 am - Link - Report abuse 0
  • ChrisR

    Shit! There’s a massive iceberg ahead and it’s been there since the K’s came to rule us.

    In fact, it’s been growing with all the money printing TMBOA has done to “balance” the books.

    Full speed ahead!

    On a pedantic note, the best way of avoiding an impending iceberg collision is to order full speed ahead with the tiller turned away from the ‘berg, thus providing sufficient flow of water over the tiller to ensure steerage way. It was the decision to stop engines and reverse them that did for the Titanic.

    Mar 28th, 2014 - 12:16 pm - Link - Report abuse 0
  • yankeeboy

    I think I should have been telling the Rgs to buy propane tanks instead of sugar.
    Oh well.
    Both are rocketing skyward

    Mar 28th, 2014 - 12:20 pm - Link - Report abuse 0
  • Chicureo

    Watch...
    ...the people will protest and the scheduled cutbacks in subsides will be delayed. Never the less, CFK has to do something...
    ...maybe blame it on a minister and fire him...

    Mar 28th, 2014 - 12:20 pm - Link - Report abuse 0
  • Condorito

    @ Axel Kicillof:
    Your transformation is advancing nicely.
    Now on point (5) of Operación Condorito:

    http://en.mercopress.com/2014/03/11/argentina-with-no-serious-economic-problems-just-complexities-and-challenges#comment313033

    If the reforms bring civil disturbance, cut faster and deeper and increase police pay.

    Keep up the good work!

    Condorito
    Universidad de Shicago
    Pelotillehue

    Mar 28th, 2014 - 01:04 pm - Link - Report abuse 0
  • Leiard

    2 Anglotino

    I don't think there are many countries that use a means test to calculate the cost of electricity.
    If electricity is subsidised, the ones that use the most will always benefit, you could also argue that they are also paying the most.
    This obsession with “redistribution” of resources from the rich to the poor does not work.
    The bottom line is that the government is subsidising electricity by more than US $ 12 billion a year.

    Mar 28th, 2014 - 01:12 pm - Link - Report abuse 0
  • Troy Tempest

    Anglotino,

    $12b ??

    Isn't that twice their real US $$ Reserve ?

    Mar 28th, 2014 - 02:43 pm - Link - Report abuse 0
  • Conqueror

    This is a really good one. Winter coming? Temperatures dropping? No problem, we'll put up the price of gas. Winter coming? Temperatures dropping? What do you need to pump round your central heating system? Water! So we'll put the price of that up as well. But, here's the real good one, when the little remaining water in central heating system freezes, expands and bursts the pipes, guess who gets to pay to replace the pipes? Or do you pump oil round the central heating system? Not really. Not enough oil. So that's “screwed” then. And it's getting colder!

    Mar 28th, 2014 - 02:46 pm - Link - Report abuse 0
  • axel arg

    THE LONG WAY TO EQUALITY.
    If nowadays there are a lot of middle class people who shouldn't be subsided by the state, respecting gas, water and electricity consumptions, is because this is evident that millions of us have improved so much our life standards since 2003. This is something that all those people who often invalid all what kirchnerism has made in the last decade, should take into account, every time they pretend to analize what has happened in the country since 2003, instead of making their usuall too partial lectures.
    Massive subsides were understandable in a context like the one of 2003, where the 53% of people were poor, and the 22% of workers were unemployed.
    It's more than obvious that millions of people shouldn't continue to be subsided, however, what really conforms me, is the fact that all those poor people who are helped by the state with social programmes, and retired people who charge the lowest pension, will continue to be subsided, because they still can't pay the true amount.
    As far as i'm concerned, i dont know whether i'll be able to reduce the gas consumption in a 20%, in order to keep of enjoing of subsided services, because winter here is very hard, although it's not as hard as in the malvinas islands, or as in england, but it is hard, anyway, what makes me feel quite, is the fact that with the payrase i got since this month, i'll able to pay the rases in the tariff, in case i'm not be able to reduce my consumption of gas, if the winter is too hard.
    This report is very good, like most of those published by mercopress, with the exception of some of them which are too partial, but this is evident that many of the forists don't learn from them, because they continue to blame on monetary emission, and on public expenditures, in relation to inflation, when actualy the causes are much more complicated, in fact, i have explained them in many of my comments.

    Mar 28th, 2014 - 03:18 pm - Link - Report abuse 0
  • bushpilot

    @10
    “because they continue to blame on monetary emission, and on public expenditures, in relation to inflation, when actualy the causes are much more complicated, in fact, i have explained them in many of my comments.”

    In relation to inflation, I think your usual explanation is not complicated but rather exceptionally simple. Businesses are too greedy.

    Printing too much money is bad economics, sorry that's too simple for you.

    Sorry I just can't see it your way.

    But your genius economist Kicillof, his genius being demonstrated by the current positive economic standing of your country, he is starting to get it. Maybe you will too.

    Gas is not the only expense that is going to vaporize your pay raise.

    I just wanted to ask:

    Is the Argentine Government cutting these subsidies because they aren't needed as much now, OR because they don't have the money for it any more ?

    If the gas is more expensive, people will try and use less, just as you have explained. Then the government won't have to import as much leading to a reduced draw on their US dollar reserves.

    Mar 28th, 2014 - 04:14 pm - Link - Report abuse 0
  • golfcronie

    The other fellow in the photo looks a bit nonplussed, I wonder why.

    Mar 28th, 2014 - 06:22 pm - Link - Report abuse 0
  • Condorito

    @10 Axel
    Prior to 2008 Argentina did not import gas, now you do and every year you import more.

    Kicillof is not reducing the level of subsidy because “millions of us have improved so much our life standards since 2003”. He is reducing the subsidy to avoid a balance of payment crisis. Pure and simple.

    Mar 28th, 2014 - 06:41 pm - Link - Report abuse 0
  • yankeeboy

    Looks like BCRA is throwing more money down the drain propping up a failing peso.

    Axel, So you'll be making U$454/mo by Oct (that's if the peso doesn't go down any more by then) with your new raise! Yippie! That will get you a nice dinner in NYC. I hope you never plan to travel.

    BTW when we first started chatting you were making U$550/mo.
    So it looks like you've been doing quite well with all those raises and increasing standards of living.
    Bahahhaaa
    breath
    Bahahhaha

    Mar 28th, 2014 - 08:25 pm - Link - Report abuse 0
  • ChrisR

    This from today’s BsAs Herald:

    Captain Dismal © ChrisR 2013 the head of ministers, announced today that “subsidies reduction have no impact on inflation, wage talks”

    He went on to say:
    ““There is no possible relation between the reduction of subsidies and the collective bargaining negotiations,” Capitanich added, questioning the position by some unions that the decrease of benefits in gas and water services by 80 percent will result in workers’ demands for higher salaries. A “strategy” by trade unionists, the minister insisted, that “have nothing to do with reality.”

    Mmm! I can see him having to rethink that little corker before the wage negotiations are finished.

    A bit like Harold Wilson, another bastard commie of the Labour ilk telling me that:

    “From now on, the pound abroad is worth 14 per cent or so less in terms of other currencies. That doesn't mean, of course, that the Pound here in Britain, in your pocket or purse or in your bank, has been devalued.”

    The Cunt Brown, © Jeremy Clarkson 2010, must have learnt this bare faced lying technique at his knee.

    Mar 28th, 2014 - 09:30 pm - Link - Report abuse 0
  • Think

    (6) Condorito

    You say...:
    ”@ Axel Kicillof...:Your transformation is advancing nicely... Now on point (5) of Operación Condorito…“

    I say...:
    I’ll ascribe your completely misplaced choice of an ”Operational” name to your youth and your personal lack of time to gain any suitable knowledge about our regional realities due to your personal choice of investing all your time into the amassing of the considerable fortune necessary to see all your kids through that very expensive Shilean private educational system...

    “Operación Condor-ito”………………………......… Se me Yela la sangre, se me…

    Mar 29th, 2014 - 05:21 am - Link - Report abuse 0
  • yankeeboy

    Argentina is following the same path as Egypt, Syria, Venezuela, Greece and other counties where populism as a lifestyle is coming to a halt and citizens take to the street in waves of protest. Years of spending, corruption and graft by the Argentine government has made the country cash-strapped. As is typical with populist countries, the chickens are coming home to roost on the backs of the poor and middle class.

    http://guardianlv.com/2014/03/argentina-just-lit-the-fuse-on-the-dynamite-called-revolution/

    Mar 29th, 2014 - 10:53 am - Link - Report abuse 0
  • ChrisR

    The TRAITORS!

    The Gruniad (Private Eye joke) dissing The Dark Country, this can’t be true!

    Oh, oh, now I have read it, IT IS TRUE!

    HA, HA, HA.

    Mar 29th, 2014 - 06:04 pm - Link - Report abuse 0
  • yankeeboy

    Electricity is going up too.
    Rut Ro
    Brr

    Mar 29th, 2014 - 07:06 pm - Link - Report abuse 0
  • Condorito

    @16 Think
    “Operación Condorito” is a perfectly unambiguous name for a plan prescribed by said “Condorito”.

    I'll ascribe your abstract vinculation of this to a military operation of 4 decades ago to your lack of youth and personal lack of time to gain any suitable knowledge about our regional post 1990s realities ....

    PS: the fortune amasses itself when you know how.

    Mar 29th, 2014 - 08:57 pm - Link - Report abuse 0
  • ChrisR

    @ 12 golfcronie (sorry for the delay)
    “The other fellow in the photo looks a bit nonplussed, I wonder why.”

    He is asking himself how the idiot Kickitoff can keep spouting the same crap with a straight face! :o)

    Mar 29th, 2014 - 09:42 pm - Link - Report abuse 0
  • ilsen

    Muy intersante....

    Mar 30th, 2014 - 07:00 pm - Link - Report abuse 0
  • DonMateo

    I think these people are running out of money. Time to quit giving away money as they are going to be voted out in 12 months time. They can leave the mess to the next bunch of thieves that get into power.

    Mar 31st, 2014 - 07:13 am - Link - Report abuse 0
  • axel arg

    BUSHPILOT. CONDORITO.
    I respect the opinions of you both, but i think that you are making a partial lecture about the causes of inflation.
    Firstly, i recommend you to search in google, the following article, which refers to the evolution of monetary emission with numbers since 2007, and where you'll see that it had periods where it was higher and lower than in others, however inflation has always remained high.
    Then, it's evident that the causes of inflation are much deeper than the typicall partial lectures that orthodox economists usually express, where they blame only on monetary emission, and on public expenditures.
    The article is: emisión de dinero, pagina12, alfredo zaiat.
    On the other hand, respecting the last decision taken by the government, in relation to subsides, i think it has two components, firstly, i think it's really stupid and unfair to keep the subsides for some sectors of middle class, who can perfectly pay the true amount, due to they have improved their life standards very much, anyway, you know what i think about the decision of keeping them for some social sectors who still can't pay the true amount. Beside, don't forget that we have an energetic deficit, which is being slowly reduced, in fact, ypf's partial renationalization is one of the main keys to finish with it. Since the enterprice was partialy recovered by the state, it increased so much it's explorations, and it's oil and gass productions, beside, there was a reduction of the imports of one of the gasses for 1200 million dollars.

    Mar 31st, 2014 - 04:14 pm - Link - Report abuse 0
  • Condorito

    @Axel
    I wasn't making any “partial lecture about the causes of inflation”.

    The factors that cause inflation are well understood as are the measures to deal with inflation. Kicillof knows exactly what needs to be done to combat inflation, the problem is that it is very difficult to fight inflation and be loved.

    With respect to the reduced subsidies, do you really think the reduction in subsidies has nothing to do with the depleted reserves in the central bank?

    Mar 31st, 2014 - 04:42 pm - Link - Report abuse 0
  • *~TROLLING_CEASE_FIRE~*

    The “article” at @17

    “Sources: Reuters, Bloomberg, Economist”

    Now I wonder why those sources would be bandying about the term “revolution”? That is beyond irresponsible, besides the fact they have zero evidence to substantiate it.

    When it comes to Argentina, they long ago became completely untrustworthy sources.

    Mar 31st, 2014 - 05:13 pm - Link - Report abuse 0
  • ChrisR

    @ 26 Trolling damp squib
    “When it comes to Argentina, they long ago became completely untrustworthy sources”

    I totally agree that The Dark Country is not to be trusted.

    How nice to see, even at this late date, that you DO have a brain.

    Apr 01st, 2014 - 10:01 pm - Link - Report abuse 0
  • axel arg

    CONDORITO.
    If you search the article i recommend you, you'll realize that our problem with inflation has more relevant components than monetary emission.
    Respecting our lose of reserves, it's mostly because the government has paid debt with reserves since 2010, the question is very ample.

    Apr 02nd, 2014 - 04:08 pm - Link - Report abuse 0

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