ARGENTINA: Argentine cuts heating gas subsidies in bid to shore up govt finances

Record ID: 448043

  • Title: ARGENTINA: Argentine cuts heating gas subsidies in bid to shore up govt finances
  • Date: 27th March 2014
  • Summary: BUENOS AIRES, ARGENTINA (FILE) (REUTERS) VARIOUS OF EXTERIOR OF METROGAS COMPANY
  • Embargoed: 11th April 2014 13:00
  • Keywords:
  • Location: Argentina
  • Country: Argentina
  • Topics: General
  • Reuters ID: LVA4A3K7Z7RTXMO7LGOCLQ01LOSH
  • Story Text: Argentina announced it will reduce the country's popular heating gas subsidies by 20 percent, a move aimed at shoring up strained government finances but that will put pressure on consumers already harried by one of the world's highest inflation rates.
    On Thursday (March 27) Economy Minister Axel Kicillof said the money saved by the subsidy cut will go toward social spending.
    Argentina's loose fiscal policy is the driving force behind consumer price increases estimated by private analysts at over 30 percent.
    Factories will not be affected by the subsidy cut, which will be aimed at homes and commercial businesses, Kicillof said.
    "Those users who reduce their consumption by 20 percent from one year to the next will not have their subsidies cut. And those who consume even less will be rewarded for responsible consumption," Kicillof said.
    "This won't be applied to industries, so as to continue with the national subsidy policy to support competition and production. We are going to monitor them, as the Argentine government and all Argentines, and make an effort to subsidize gas to specific industries so that they also meet the commitments they have with the national government and society," he added.
    Argentina's finances are feeling the strain of the country having been cut off from the international capital markets since its 2002 sovereign bond default.
    Moody's Investors Service cut Argentina's government bond rating further into junk earlier this month, saying a sharp drop in central bank dollar reserves has raised concern about the country's ability to service its remaining foreign debt.
    Reserves are down 33 percent over the last year to $27.1 billion.
  • Copyright Holder: FILE REUTERS (CAN SELL)
  • Copyright Notice: (c) Copyright Thomson Reuters 2014. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register