2024-02-25 04:13:36
The relationship between Government of Javier Milei and the provinces are not going through their best moment. Yesterday, the governor of Chubut, Ignacio Torresthreatened to cut off the supply of gas and oil due to the fall in prices. co-participating funds and his peers quickly came out to support him.
The central administration was quick to react and accused the PRO leader of having a “Chavista” attitude.
Can Chubut really stop the supply of oil and gas to the rest of the country? Is there any intention of the Government to pay what is claimed? Below we explain six keys to the conflict:
1). What does Chubut claim?
According to the letter sent by Torres to the Nation, in February the Ministry of Economy of the Nation illegally withheld $13.5 billion from Chubut; “more than a third of your monthly contribution.” Likewise, he stated that “the national government illegally withheld the funds destined for the Compensation Fund for public transportation fares.”
In this sense, he explained that they are resources from the fuel tax and have a specific allocation. “Only a law could provide for another destiny and yet they were retained,” explained the Chubut president in a letter also signed by his peers from Tierra del Fuego, Santa Cruz, La Pampa, Neuquén and Río Negro, reported an article on the portal. Infobae.
2). How much money did the province receive this year?
Until this Friday, February 23, the fifteenth business day of the month (which had two carnival holidays), according to the details of daily shipments from the National Directorate of Provincial Affairs of the Ministry of Finance, Chubut received $25,391 million from the Nation, adding the co-participation shipments and “Compensation for Fiscal Consensus”. But it received just $2 million in “service transfers” such as Education, Health, Hospitals and Minorities and just $3 million from the “Provincial Fiscal Imbalance Compensatory Fund.”
In January it had received from the Nation, for all reasons, co-participation and “compensation” shipments, a total of $34,622 million, always according to information from the Ministry of Finance.
3). Is it legal to stop the supply of oil?
Francisco Romano, partner of the Pérez Alati, Grondona, Benites and Arntsen Law Firm and co-director of the Energy Institute of the Austral University, told Infobae that what Governor Torres is doing is cutting off the shipment of gas and oil, demanding $13.5 billion of cuts in co-participation, “it doesn’t make sense.”
Romano told Infobae that according to article 124 of the Constitution, the Provinces are owners of their resources, but due to the concession system they have awarded exploitation to private companies and they have free availability of the hydrocarbons they produce. Therefore, the crude oil produced is no longer from the province. “Prohibiting their departure from the provincial territory is equivalent to creating internal customs, prohibited by the National Constitution,” he warned.
In any case, explained the lawyer expert in hydrocarbon law, “what the province has to do is go to court; not generate direct action measures that violate the Constitution.”
“The oil provinces collect royalties from the companies every month. Nation has nothing to do with it,” she added.
4). How much oil and gas does Patagonia contribute?
Chubut’s participation in total oil and gas production is truly significant. According to the latest data published by the National Energy Secretariat, in 2023 Argentina produced 36,867,693 m3 of crude oil and 48,109 million m3 of gas. The Patagonian province had a “share” of 21.4% and 5.82% respectively.
If all of Patagonia is considered (the other governors of the region joined the claim), the numbers are even more compelling. According to statistics published by the consulting firm Oil Production Consulting, the three basins found in that area (Austral, Neuquina and Golfo de San Jorge) contribute 98% of the country’s total oil production.
Regarding gas, Patagonia has a 97% participation. In that case it is Neuquén, with Vaca Muerta, the undisputed production leader.
In the case of reserves, the aggregate of the 3 basins located in Patagonia means that they hold 89% of the oil reserves and 98% of the gas reserves of Argentina.
5). What had the Nation and Chubut agreed upon?
At the beginning of January, after meeting with the Minister of the Interior, Guillermo Francos, Torres had said: “We are negotiating with Francos compensation with Chubut to not pay the debt with the Trust Fund and Anses.”
A week later, Francos himself and the Minister of Defense, Luis Petri, met again with Torres, but on that occasion to talk about the changes to the Federal Fisheries Law included in the Omnibus Law project that the government finally withdrew. congressional.
6). What did the Government respond to the threat?
Through a statement, the Office of the President indicated that the funds claimed by the province correspond to “a debt that the province of Chubut maintains with the Trust Fund for Provincial Development.” In that sense, they explained that the collection of said debt “is carried out by direct discount of the Co-participation.”
“In no way will the National Executive Branch contribute to financing the waste of the provinces that refuse to reduce unnecessary expenses, eliminate expendable political positions and govern with the austerity that the inherited economic crisis requires,” stated the Executive Branch.
“For all of the above, Governor Torres is informed that there is no need for him to set any time frame to carry out his extortion plan. Proceed with your threat immediately and face the consequences in court,” was the Government’s defiant response.
At the same time, the Minister of Economy Luis Caputo responded in his X account that “the debt of the Province of Chubut with the Provincial Development Trust Fund as of 02/29/2024 amounts to the sum of $119,091,257,332.36. The Government of the Province of Chubut did not present any request for debt cancellation.” “According to the terms of the loan, the fees are automatically deducted from the shared resources. Currently, there are 10 other provinces that have debts with the Trust Fund, under the same conditions,” said Caputo, who added that “the Nation is simply complying with the conditions agreed upon in the agreed loan.”