Argentine President Cristina Fernandez has announced plans for a 300 percent hike in natural gas wellhead prices, an increase aimed at spurring greater investment in that sector.
During the inauguration of a diesel refinery in Ensenada, Buenos Aires province, the president said the price per cubic meter of gas will rise from around 3 cents to 13 cents, marking an end to price controls that have been in place for a decade.
Fernandez said energy companies, including state-controlled energy firm YPF, will see their profits rise by a combined 900 million pesos ($200 million) annually as a result and that, in exchange, the firms will be expected to "respond with investments."
"I don't give signals to the market. I'm not a signal-giver. I'm a president, who must give rational signals not only to the market but to all society," Fernandez said.
During her speech, Fernandez criticized the media for questioning her decision to create an oil planning commission to ensure companies' investment plans meet Argentina's energy needs.
Some media outlets said YPF CEO Miguel Galuccio opposed the decree due to the supposed negative effect it will have on investment and his company's search for international partners and threatened to resign, but Fernandez denied those reports.
She said the media was determined to tarnish the image of YPF and Galuccio, who was appointed after the Argentine government seized a controlling stake in the company from Spain's Repsol earlier this year.
Referring to the new commission formed to regulate the oil sector, Fernandez said similar agencies exist in Brazil and Colombia and wield even greater powers.
The commission, she said, will promote oil and gas exploration and seek to expand Argentina's refining capacity, guarantee fuel supplies at reasonable prices, ensure free and fair competition in the sector and supervise the companies' investment plans.
The plant inaugurated Thursday has an annual capacity to produce 1.75 billion liters of low-sulfur diesel - a fuel that Argentina has been forced to import - and was built at a cost of 1.5 billion pesos ($326 million). EFE