Argentine court rolls back Macri's 300-1000% gas utility hikes nationwide.
The Macri administration’s austerity program was thrown into turmoil yesterday after a federal appeals court in La Plata ordered that the recent drastic increases on natural gas rates imposed by the administration be retracted nationwide to rates prevailing on March 31, before the initial rate hike of around 300% was approved by Energy Minister Juan José Aranguren.
In their decision, Judges César Álvarez, Olga Calitri and Leopoldo Schiffrin declared “null and void” Energy Ministry resolutions which authorized the increase, concluding that no public hearings were held before the hike was implemented. They added that the “unreasonability” of the hikes - which in many cases have reached 1000% - should also be considered.
Aranguren is facing separate charges of using his public office for personal benefit by way of these rate hikes and of a $100 million contract signed with a Chilean subsidiary of Shell Argentina (in which he served as CEO for 12 years and still holds millions in stock).
The ruling by the La Plata Federal Appeals Court was issued the same day that courts in Río Negro, Neuquén, and Salta ordered freezes on all increases for three months in their respective provinces. The Energy Ministry announced that a per saltum request will be filed this Tuesday in front of the Argentine Supreme Court, thus bypassing the normal appeals court process in their push to reinstate the rate hikes.
The request to freeze rates had been filed by a group of consumer advocacy associations, including the Argentine Consumers association; the CEPIS public interest center; and the Association for the Defence, Education, and Information for Consumers. These institutions had already obtained a favorable initial ruling, which had agreed on the need for a hearing but not on the request to retract the rate hikes.
The associations considered that the “constitutional right of citizens participation” had been violated by the lack of public hearings. Aranguren claimed that no hearing was needed as one had already been held in 2006, when the rates were going to be increased but ultimately were not. The magistrates, as expected, said that previous public hearings can’t be considered valid as they were carried out under different circumstances.
The court decision was welcomed by provincial lawmakers from the opposition Victory Front (FpV), who had previously backed the filing. “The national government can’t take these decisions without talking to the people. If the rates have to be adjusted, it has to be done constitutionally and by discussing the parameters at a public hearing,” local lawmaker Juan Manuel Cheppi said.
The increase on natural gas rates was announced by the Macri administration in April, followed by hikes on electricity, municipal water consumption and bus, train and subway rates. With the move, the Energy Ministry claimed to be saving up to $4 billion this year on subsidies to natural gas production and consumption. Last year, however, total natural gas subsidies reached $2.2 billion: $1.7 billion for production and $478 million for imports by state-owned distributor Enarsa.
At: http://buenosairesherald.com/article/217646/court-rolls-back-gas-hikes-nationwide
