Argentina weighs up energy price adjustment

Buenos Aires, Dec. 26, 2013: residents of the Villa Crespo neighborhood demand the resumption of power services after a 15-day blackout (source: dpa)
Buenos Aires, Dec. 26, 2013: residents of the Villa Crespo neighborhood demand the resumption of power services after a 15-day blackout (source: dpa)

Argentine President Mauricio Macri must cope with an energy sector in dire straits. Policy over the past decade has been inconsistent and often counterproductive. Subsidies weigh heavily on public finances. However, reforming the hydrocarbon extraction and refining industries should prove far easier politically than solving the country’s challenges in electricity production and distribution.

When President Macri took office in December 2015, he inherited an energy policy that strongly favored oil companies, compensating them for restrictive regulations with public subsidies. Low oil prices give his new government an opportunity to eliminate both the restrictions and the subsidies at m...

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