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Government Backtracking on Retroactive Increases to Gas Bills

Yet another backtrack on a controversial decision.

By | [email protected] | October 10, 2018 4:58pm

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In yet another episode of the Macri administration’s “trial and error”strategy, the government is backtrack on its decision to implement retroactive increases to gas bills, initially aimed at compensating gas production companies for the increased costs they incurred in as a result of the recent devaluation the Argentine peso.

According to Clarín, the government will now compensate those companies in 24 payments starting in October 2019. It is still uncertain whether the Macri administration will pony up the AR $20 billion companies claim to have lost, or if both parties will each take care of a percentage.

A main reason for this decision was the possibility that this particular battle would jeopardize the government’s chances of passing its 2019 budget bill. The Macri administration considers this law instrumental to implementing its economic program, in accordance with a revised stand-by agreement reached with the International Monetary Fund in September.

In fact, all opposition caucuses yesterday called for a special session in Congress on October 18 in order to annul the increases. The measure did not enjoy consensus within the coalition either. The Unión Cívica Radical, one of the three parties that make up Cambiemos, had in fact requested that both the government and gas companies absorb half of the cost each.

The decision seems to have been extremely recent, considering that just a few hours ago, President Mauricio Macri defended the increases, saying that even though “he was the first one to understand” the discontent, “energy has a cost and we have to pay for it.”