Milei in trouble: Argentina’s oil provinces are threatening to cut off his supplies
Argentina's oil-producing provinces have threatened to cut off oil supplies to the rest of the country if Javier Milei's government goes ahead with plans to withhold billions in federal tax revenue.
“Not a drop of oil will come out on Wednesday if they don't respect the provinces once and for all and take their foot off our backs,” the governor of the southern province of Chubut, Ignacio Torres, told a local TV channel, as reported by AFP .
The central government wants to withhold the equivalent of about 15.3 million dollars from Chubut province to pay unpaid debts from this and 10 other provinces, as explained by Economy Minister Luis Caputo.
In response to the threat, the Argentine president wrote on X accusing the Chubut governor and his colleagues of being “ fiscal degenerates .” The spat prompted one local analyst to warn that the president may have bitten off more than he can chew.
“There is a rebellion in the provinces and a misassessment by Milei about the level of conflict,” Artemio Lopez told AFP. He then explained that it is one thing for the president to clash with an unpopular parliament, but provincial governors are another type of adversary.
“Most of them obtained a higher percentage of votes than he obtained in the last elections,” so the clash could affect the new president's popularity.
In the end the provincial governments proved to be quite reasonable and said that this is just a pressure tool to get a deal with the adamant president.
Patagonia, in the southern part of Argentina, is home to the majority of the country's oil production, present and future. The Vaca Muerta shale field, the second largest in the world, is located in the northern part of the region, but the state company YPF recently announced a discovery of oil and gas from the shale in Chubut, 1500 km south of Vaca Muerta,
Currently, Vaca Muerta accounts for about two-thirds of Argentina's oil production. Last year, investments in this sector were expected to reach $10.7 billion, an increase of 18% compared to 2022. Milei promised to break YPF's oil monopoly to improve the exploitation of the country's resources and boost the economy.
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The article Milei in trouble: Argentina's oil provinces threaten to cut his supplies comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/milei-nei-guai-le-province-petrolifere-dellargentina-minacciano-di-tagliargli-i-rifornimenti/ on Wed, 28 Feb 2024 08:30:45 +0000.