The former official regretted that he had not been able to implement a compensation fund that would have cushioned the variations in fuel prices,
Former Energy Minister Juan José Aranguren evaluated his management within the Government led by Mauricio Macri and admitted that they did not have “the ability to communicate what we wanted to do”
Furthermore, Aranguren regretted that it had not been able to implement a compensation fund that would have cushioned the variations in fuel prices, in a context of differences between different actors of the previous government.
After several months of low profile, the now business advisor with his consultancy Energy Consilium, began a while ago to comment on the energy policy applied by the administration of President Alberto Fernández.
In recent days, the abrupt drop in the international price of oil caused a shock in the sector, since with a price of a barrel that is currently around $ 33, investments in Vaca Muerta become practically unfeasible.
One of the alternatives that was evaluated by the Government is the return of the so-called “Creole barrel”, a local price -which is negotiated between production companies and refining companies- decoupled from the global price to sustain investment and employment levels.
Since 2007, approximately, through various mechanisms, local crude oil prices have remained lower than the international reference price, which then exceeded US $ 100. However, as of August 2014, the Brent barrel began trading below the local price and the “Creole barrel” was applied.
In 2017, with Aranguren as minister, the Mauricio Macri government went again to international prices.
“After what happened last Monday with the crash of the international markets and the price of oil, it is probable that some type of Creole barrel will be introduced; that Argentina will be separated from the world again. In this case it is to protect the investment, at some point was to protect the consumer, “said Aranguren in a talk with journalists.
In this context, Aranguren regretted that due to the current situation, Vaca Muerta cannot generate the foreign currency that the country needs.
“Some say we have to align ourselves with the world. If that happens, investment will be limited. Who will drill and fracture to receive less than the cost?” Asked the former minister.
However, he warned that if one advances to a local price scheme decoupled from the international price, it must be done with some exit option.
“Today consumers are paying a certain price for fuels. The last price paid in December was $ 52 a barrel. Now the refiner (the companies that process the fuels) can expect it to drop to $ 40, for example , at values that allow the drop in fuel prices to be reflected. The Creole barrel is simply a transfer from the consumer, “said the former official.
“If the government decides to lower the fuels, there is an impact on the companies, on the level of investment and the provinces are totally underfunded. For this reason, I believe that Creole barrel would have to be the consequence of an agreement. We have to avoid a circumstance where We live in a handsaw, when the price is very high, we put a retention on it, when it is very low, we put a Creole barrel on it. We have to do something that is more structural, “he added. For example, he suggested an exit from the Creole barrel when international prices recover or a stabilization fund to act as a reducer of market fluctuations.
He also gave his opinion on the current value of fuel prices – naphtha and diesel – at the pumps.
And he recalled that, from the end of the Macri Government until now, increases in the Tax on Liquid Fuels have been postponed, which must be updated quarterly.
As detailed, that delay generated that today that tax has a delay of 23% that if applied would impact a 6.6% increase in the price of gasoline and a 5.5% for the price of diesel.
“You have to see if with this circumstance that oil falls if you decide to apply it and it is absorbed,” said Aranguren.
Regarding his management, the former official assured that when he left the Creole barrel and went from a fixed tax to a variable tax on fuel prices, a compensation fund should have been implemented.
“There was an internal discussion between different factions of the government at the time that limited that capacity, which gives you a kind of buffer for volatility damping. We did not have the ability to adequately communicate what we wanted to do; that could have been done differently,” he said. .
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